How do you think about the value of restricted stock vs options and cash? If the company’s stock price is $100 with a very clear path to $150 in the near term (6-9 months) and decent one to $200+ would you rather get 300 options at $100 or 100 RSUs? It seems to me value is in options but I think my colleagues value RSU more.

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If your forecast is accurate then obviously options is better. If you are risk averse then RSU. Ahead Atleast some value even if they go under

likesmart

Is this a public or private company?
There are several examples of private companies whose value grew and grew, until they IPOd and saw that valuation slashed in the public market.
Also keep in mind that future valuation growth that recruiters sell you may be misleading.

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Your scenario only works if you know the stock will go to 200. At 150, 150x100 RSU = 15k, 50x300 options = 15k. If the stock is for sure going over 150 then options are good, if not RSU are better value and will never go to 0.

How much do you believe in this company, and how clear is your crystal ball? Because if there’s a company that you _know_ will double in market value, maybe just park all your savings in call options, you won’t need to work at all.

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Options it depends obviously on strike price but in general very little value to me. Take your example: absolutely no guarantee that your company would see that growth and they break even at 50% growth versus RSUs.


The balance point in this example is something like 6-8 options for one RSU. I generally put a 80 cent value on one dollar cash of RSU assuming 4 year even vest.

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If you got an offer in a private company along similar lines how would you think about value of stock vs cash or options.

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