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The problem is that RSUs are still a joke and can be taken from you easily. ISOs have way, way more power. https://www.retina.net/tech/rsus-vs-options.html htt

by netik 10y ago

The problem is that RSUs are still a joke and can be taken from you easily. ISOs have way, way more power. https://www.retina.net/tech/rsus-vs-options.html https://www.retina.net/tech/rsus-vs-options.html

ariwilson 10y ago
I know nothing about RSUs at pre-IPO companies, but RSUs at public companies are worth real money, a fact this article fails to mention.
- jdmichal 10y ago
  So are options. Options at a public company can typically be exercised and sold as an atomic operation from the owner's perspective, with the exercise price (and taxes) being extracted from the sale's proceeds.
pbecotte 10y ago
That article is terrible, please do not use this to make decisions. Just about every "downside" he lists could also apply to an option grant. All equity grants will come with an agreement and restrictions on whom you can sell them to and under what circumstances, whether options or RSUs. Worse, he goes on for quite some time about how little upside you have with RSU. That has NOTHING to do with the RSU itself- it comes because companies that issue them typically do not have much growth left in them, not because it is a RSU vs an option. The differences between them are... 1. Tax treatment (A RSU counts as income when you receive it, an option counts as income when you exercise it and get stock. Remember, many people recommend early exercising options anyway for preferable tax treatment, though this can lead to taking a loss on taxes if the shares wind up worthless. If you are forced to exercise a large block of options when they are still illiquid, you will have a very large one time tax bill, which may be much harder to deal with than smaller ones each year) 2. Risk (For options, you have to dish out cash from your pocket to actually receive stock, which is more risky than if you don't. Until exercise, the two choices are similar) In general, I would prefer options with a long exercise period, but I may prefer RSU to options with a short one...

by netik 10y ago

ariwilson 10y ago

I know nothing about RSUs at pre-IPO companies, but RSUs at public companies are worth real money, a fact this article fails to mention.

jdmichal 10y ago
So are options. Options at a public company can typically be exercised and sold as an atomic operation from the owner's perspective, with the exercise price (and taxes) being extracted from the sale's proceeds.

pbecotte 10y ago

That article is terrible, please do not use this to make decisions. Just about every "downside" he lists could also apply to an option grant. All equity grants will come with an agreement and restrictions on whom you can sell them to and under what circumstances, whether options or RSUs. Worse, he goes on for quite some time about how little upside you have with RSU. That has NOTHING to do with the RSU itself- it comes because companies that issue them typically do not have much growth left in them, not because it is a RSU vs an option. The differences between them are... 1. Tax treatment (A RSU counts as income when you receive it, an option counts as income when you exercise it and get stock. Remember, many people recommend early exercising options anyway for preferable tax treatment, though this can lead to taking a loss on taxes if the shares wind up worthless. If you are forced to exercise a large block of options when they are still illiquid, you will have a very large one time tax bill, which may be much harder to deal with than smaller ones each year) 2. Risk (For options, you have to dish out cash from your pocket to actually receive stock, which is more risky than if you don't. Until exercise, the two choices are similar) In general, I would prefer options with a long exercise period, but I may prefer RSU to options with a short one...