This is a fantastic realization to have. Getting stock as compensation is a bit like getting lottery tickets as compensation. This is triply true if they're options rather than actual stock.
I learned decades ago to ignore the stock component of compensation packages when evaluating an offer. I'll never turn stock or options down, but they will also never be something that will "tip the scales" for me.
I definitely think it makes sense to apply some discount to stock compensation when comparing offers, but if stock in a large publicly traded company is very likely worth something.
(as have many other names, not to pick on twlo specifically). I actually think (and so far am right) that it was massively undervalued at $45 a share.
The big public companies are making sure that your annualized total comp is in the right range, because if it isn’t (so the assumption goes) you’ll just move to another BigCo that will cut you a fresh grant at market rate.
IBM would just fire you. Ditto for most of the other F500 sphere.
Not all CA tech companies give huge RSU grants, but the biggest ones tend to.
Sure you can. You just gauge based on the base pay alone. If that's adequate, I'm good to go. If it isn't, then I'm not. That way, I'm not hurt if the stock ends up being worthless.
I may be leaving money on the table, of course, but I'm also eliminating unnecessary risk. Other people may have different risk tolerances, naturally. My main point is that counting stock as part of a compensation package is the same as buying stock -- you need to be aware that you're taking on risk.
If Netflix is going to pay you $200K/yr and Facebook $180K plus $400K in FB shares vesting over 4 years, IMO, it's an error (IMO) to conclude that Netflix's offer is $20K/yr more than Facebook.
I don't consider that a risk at all, but I get that others might. This sort of thing is what makes acceptable risk evaluation such a personal thing.
To me, "risk" means that income I'm expecting doesn't happen. The risk you're talking about doesn't count as risk to me, because any money left on the table is money I wasn't expecting to get in the first place, so I haven't lost anything. I just failed to gain something that I could have.
I don't think my attitude is incorrect (it's saved me from a lot of actual loss over the decades), and I also don't think that yours is incorrect. It's more about what makes the most sense considering our personal situations, temperaments, etc.
I also acknowledge that I'm unusual in the HN crowd in that I am not primarily money-driven. When I'm considering a position, the compensation is the third or fourth most important consideration, not the first.
I'm reasonably money-driven, but I also heavily discount the value of stock or options, because while I've come out ahead on my shares and options in almost every company I've worked in, the effective return has ranged from very decent multiples of the initial valuation to 1% of it, so I'm very comfortable applying a very high discount (reducing said discount for e.g. listed companies - but one of my best returns was from a listed company where the best engineer on my team was still under water on the vast majority of his options 7 years in, and now long after their expiry the price has never been as high as then)
Put it this way, at the limit. Company A pays $120k + $1,000,000 dependent on the result of a random number generator where there is a 99.999% chance that you'll get the money. Company B pays $125k. All else being equal, any rational person would obviously choose Company A.
But if you're saying you discount variable pay by 100%, you would choose company B.
Or think of it another way. How much are you willing to pay to avoid loss. What you're doing is equivalent to buying insurance to avoid loss. How much would you pay for such insurance? There has to be a limit.
What I do is the same as the commenters who say they discount the face value of stock when assessing the compensation. I just discount it more deeply than they do.
In the end, you can't ignore it.
As a bit of real-life anecdata, I knew someone who struggled to pay their mortgage when AMZN dropped ~30% in 2018.
My middle ground was to sell ~50% of my vesting meaning I took some risk off the table, but also wouldn't feel left out if it moonshot. People with economics (game theory) degrees likely could figure out a better way to deleverage + prevent fomo.
Either way you just figure the chance of losing all or some of it into your expected value calculation.
I roughly value RSUs in a late-stage private company (say, Stripe) at 50%-75% of market value when considering an offer, while a very early stage options grant is almost worthless to me, say 5% of its value.