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Stock options are not limited to private companies. Public companies do stock options too. The only difference from RSUs is if stock goes below your strike pric
by woobar 3y ago
Stock options are not limited to private companies. Public companies do stock options too. The only difference from RSUs is if stock goes below your strike price they are worthless at vesting. You still can wait it out.
Everyone at my dinosaur financial company was getting them 15 years ago. Not a life changing amounts at my level though.
- scarface_74 3y agoThat’s quite a bit different don’t you think? And stocks don’t always “go back up”. I would have hated for my RSUs to be worthless as my stock dropped 40% from its highs before they vested. At least I was able to sell them and diversify.
- hgsgm 3y agoOptions have higher volatility. This is not a mystery and doesn't mean EV is 0.
- singron 3y agoYou can lose money in options, which means the EV can be negative. E.g. you leave the company and are forced to exercise or abandon the options. If you exercise, the company can stay private until you die or liquidate at less than what you paid.
- woobar 3y agoQuite different from your previous point (i.e. that they are worthless)? Don't think so. They are a good addition to the salary plus bonus. Now these old companies switched to RSUs.
- scarface_74 3y agoWorthless meaning. If only 1 in 10 companies ever see a “successful” exit and if even then, my equity may end up being essentially nothing after the investors and founders get theirs and it’s illiquid, why should I value equity at anything more than $0 when comparing compensation?
- woobar 3y agoI am not sure you have read what I said. Already public companies were giving away stock options as far as 15-20 years ago. 100% of them had successful exit.