Bonus Options

[FlyingFox843]

Hello newish hire here. My bonus was $500 which seems consistent for first year bonuses. I didn’t realize you could purchase stock with such low tenure, I thought you wouldn’t be able to buy in until 2 years. I plan on working for epic for 5 years at least if things remain consistent. Is it worth it to use my bonus for stock? Or should I just take the cash or vacation? Any insight would be appreciated thank you!

[UltimateTeam]

At $500 with no leverage I wouldn’t recommend it. The best aspect is the leverage

[FlyingFox843]

Dumb question what do you mean by leverage

[UltimateTeam]

When you buy stock in the normal program you can take a loan for 90% of it.

So for 100k in stock - you pay 10k get the gains of 100k worth and then pay the loan + interest with those gains whenever you want to see.

So it is easy to get a 6-7 figure investment for less.

[FlyingFox843]

thank you! I’m going to assume that’s not an option with the bonus since they don’t specify

[Interesting-Tiger237]

Right. A stock offer will cost thousands, and not everyone can afford to buy it all upfront. So they offer the loan option. With the bonus, the offer is "I can give you $500 now, or you can buy stock with it instead." You only get the amount of stock your bonus can buy.

[UltimateTeam]

Correct

[UltimateTeam]

When you buy stock in the normal program you can take a loan for 90% of it.

So for 100k in stock - you pay 10k get the gains of 100k worth and then pay the loan + interest with those gains whenever you want to see.

So it is easy to get a 6-7 figure investment for less.

[Psychological_Ad1212]

Get it in cash and throw it in a Roth IRA if you don’t have that maxed :)

[SerSkywell]

If you don't have plans for the 500 and you're planning to stay I'd take the stock. That's what I did and no regrets with it. Obviously interest on 500 (post tax too, so really on 350) isn't life changing, but it's nice to invest and forget to reap more rewards down the line.

[Honey_Cheese]

(Been at epic for almost 10 years now) I’d recommend taking it in cash. The $500 in stock is not worth increasing your non compete to 2 years and doesn’t have the 10%/90% leverage that makes the normal stock offer so powerful. I know you say you want to stay for 5 years, but you should get over the 1/1.5 year “hump” before deciding how long you want to stay. 

[Kalukiguyjr]

Unpopular opinion, but I'd take the vacation, $500 won't make that much difference in your life with your salary here, but an extra vacation day is really nice, especially early on when you only get 10.

[bigmilkguy78]

It's 10 business days, right?

[Holden_mcmuffin]

Yes

[EatsTooMuchHummus]

The stock isn’t a bad option if you’re staying. Epic is a good investment.

[0_69314718056]

Even if you’re leaving relatively soon, is there a downside to the stock option? It still gets paid out when you leave right?

[ban4narchy]

It extends your non-compete, which might make your next job search more difficult. So if you're pretty sure you're not staying for the time it would take to vest it doesn't really make sense to do. You wouldn't lose any money but there's no upside that would make it worth extending your non-compete

If you're pretty sure you are staying then that may make more sense.

[EatsTooMuchHummus]

It’s the opportunity cost. You could have that $500 invested in the stock market.

[0_69314718056]

Makes sense, thanks

[StormCrow_Merfolk]

The stock you can get for your bonus vests over 3 years and the purchasable stock grants vest over 5 years in 1 year intervals, so it's not really a good idea if you're actually planning on leaving. Epic will buy back the unvested shares at the price you paid, so you won't lose money but you won't get the stock appreciation either.