SpaceX's recent IPO created a wave of millionaires, but what about those who didn't win the lottery? The article explores the darker side of stock compensation, where not everyone gets to share in the success. Patrice Gélinas, a partner in executive compensation at Mercer Canada, warns that equity-based incentives are not always a guarantee of wealth. He notes that many companies struggle to maintain their value, leading to zero gains for participants. The tech sector, driven by artificial intelligence and machine learning engineers, is a prime example of this trend. While median equity grants have risen significantly, salaries have increased at a slower pace. This disparity highlights the risk and potential rewards of stock-based compensation. Yannick Lemay, a tax training specialist, emphasizes the tax implications of such compensation, especially in private companies. Ted Rechtshaffen, chief executive of TriDelta Private Wealth, advises caution, warning that investing heavily in a single company can be risky. The article concludes by questioning the stories we tell about the winners, while often ignoring the losers, and the emotional and financial risks associated with equity-based compensation.
