Diversifying tech equity can outpace holding company stock, study shows
A recent analysis by Levels.fyi finds that a senior Microsoft engineer who sold vested shares and reinvested in the S&P 500 would have earned about $50,000 more than a peer who kept the Microsoft stock.
Levels.fyi compared two compensation scenarios for a senior software engineer at Microsoft. In the first, the employee liquidated each tranche of stock as it vested and placed the proceeds into a broad market index fund. The second scenario assumed the worker retained all Microsoft shares. The calculation showed a roughly $50,000 advantage for the diversified approach. The report notes that while AI-focused firms such as Nvidia, OpenAI and Anthropic have generated spectacular returns, spreading investments remains a prudent strategy for most tech staff.
Why it matters
It highlights how simple diversification can boost earnings for tech employees, countering the lure of holding high-growth company stock.
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