RSUs are less tax efficient because they are considered ordinary income, marked to market, at the time they vest. ISOs, on the other hand, are subject to moer a

RSUs are less tax efficient because they are considered ordinary income, marked to market, at the time they vest. ISOs, on the other hand, are subject to moer advantageous capital gains, and there's more control over when taxes will be realized. The downsides of ISOs are: - They cost money out of pocket to exercise. - They have to expire within 90 days of separation from the company. - They get complicated when you can't simply early exercise+83b them. As I said earlier, I think RSUs are ultimately probably better after the exercise cost becomes non-negligble. But ISOs have their perks under the current tax code. Ultimately, I think the IRS should scrap the ISO. Just let employers award stock with a cash basis at vest time and gains realized at the point of liquidity. It would be much simpler for everyone to deal with.