RSUs vs Stock Options

Investing
#1

Hi @Jeremy,

I recently joined a new company (Big public company listed under S&P500) and I need to choose between the below two -

  1. 100% RSUs
  2. 50% RSU and 50% Stock options

As I am new to the options world, I am not sure which one to choose. Any insights from you will be really helpful.

Thanks,
Tanmay

#2

Hi,

there are several areas to consider

  • How long are you going to stay in the company? The longer you stay, you have a higher likelihood of stock value increasing, hence go for options
  • How much do you believe the stock price is going to increase?
  • Diversifying taxes. RSU are taxed immediately and stock options when you exercise them (deferred)

I am not an advisor but for a first timer the 50/50 sounds like a good exploration of both to get familiar with them. You might get a refresher after a few years or a promotion and then you will have more knowledge on both. If you are risk adverse, RSU is safer.

I hope this helps, thank you