Stripe: Internal meetings good; RSUs possibly overrated
Stock payments in fintech are either a holy grail or a poisoned chalice. They give you an opportunity to bump your total compensation up significantly but place your wealth in the hands of a startup operating in a very difficult market. Stripe, one of the largest and highest paying fintech unicorns has gone full-frontal on the issue.
In an interview with the Times, John Collison, co-founder and president of the $55bn payments giant, said it's not good for founders to get too hung-up on the value of the company (and, by implication, the value of their restricted stuck units or RSUs). "You don’t feed your family with equity valuations," said Collison, adding that "it’s really a mistake for founders to get too caught up in all that.”
Stripe employees who've been nursing a fall in value of their RSUs might be reaassured. Stripe's valuation has been relentlessly cut back in the past two years, with its valuation nearly halved in a March fundraising round. Ironically, that round was to raise $6.5bn to help compensate employees for tax liabilities created by RSUs that have already vested. In an ideal world, those liabilities would have been compensated by the IPO itself.
Collison implied that Stripe employees should be accepting of the fact that the value of their RSUs is down. Stripe is full of "very smart" people and that they "were not expecting that the way Stripe was valued in 2021 was the way it would be valued in 2023."
Getting those kinds of massive RSU payments can also be detrimental to your future endeavors if you leave before they are realized. On jobs forum Blind, one engineer from FAANG noted that, despite performing very well during a job interview for Citi, the bank was apprehensive about hiring him. He hypothesized that his $500k in RSUs (which the bank would have to pay off) were a reason he was turned away.
If Stripe were to go public, things would change. But an incredibly short list of fintechs are launching an IPO in 2023 and Collison confirmed that Stripe itself "has no plans to go public."
Collison also spoke about the benefits of internal meetings, saying "a lot of the accidental or chance interactions often end up being pretty meaningful." $81bn eCommerce fintech Shopify became staunchly anti-meeting at the start of this year as it implemented a "calendar purge."
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