That's a fair assessment. However, there's one other thing to consider: his making the decision for you also shifts the responsibility to him. If the money was just part of my salary, I would probably have second thoughts about taking an interesting but expensive vacation: I would consider being "responsible" and saving the money or something.

Even if a good vacation is worth doing--and, I believe, it really is--there is still some guilt with "wasting" money on something that isn't obviously "productive". I rationally know that enjoying myself is not a waste of money, but that doesn't help deal with my inner biases! Now, I don't want to say you have to spend a lot of money to get a good vacation--you don't. But it does create more options, and some of the things I really love (like travelling to Europe) have fairly high barriers to entry.

So having somebody allocate the funds for me makes it much more likely that I'll spend them on something exciting and enjoy myself with it. I suspect the sort of people working at a company willing to pay you $7500 for a vacation don't need to worry about paying the bills too much, but there is still an incessant nagging to be economical.

I was actually originally thinking about this idea in a completely different context. There is a nice parallel between this and the sorts of prizes you get at hackathons (usually electronic gadgets): in a certain sense, that prize is worth more than its price because I would not have spent my own money to buy it. It's slightly weird logic, but I think it's accurate: there's a big psychological difference between opportunity cost and actual cost. Sure, I could have $500 instead of a tablet, but if I'm just going to win something, I'd rather it be the tablet.

In short: I think this scheme is a good way to overcome my innate resistance to spending money on things that seem to be a "waste", even if I would enjoy spending it that way and probably get higher utility than just by saving it.

I really like the idea of "forced benefits" - free meals, paid vacations, devices as "bonuses", etc, since they force you to raise your standard of living. I wouldn't eat out for lunch every day because there are other things that I'd rather spend my money on, but since work pays for it, I'm much happier - it makes my life easier, I get to eat better/more interesting food and saves me time. Same goes for vacations - I would love to go and see China, but it'll be a while before I can justify the expense. If someone were to hand me a check for $7,500 though and say "this is for your vacation", I would do it in a heartbeat - and I think be better off for it. I mean, presumably this comes on top of a generous salary already, but I think it's a good thing to help people get over their own biases toward spending.

I suspect hanging around with friends for a week would be perfectly acceptable.

For others, it might be hanging on the couch, eating Taco Bell and watching bad cable all week

Presumably they mean "disconnect" from the company rather than all people you know.

we want you to disconnect from work. if you want to hang out with friends, that's cool. just don't work (which, surprisingly, lots of people have trouble doing, especially in startups)

Is it ok to read HN on vacation?

You can take that week off and just save the 7500.