A Comparison of Employee Stock Options vs. Restricted Stock Units

Employee stock options and restricted stock units are collectively discussed under the umbrella of equity compensation. As equity compensation, they have some similarities. Yet they also have a lot of differences. It is these differences that are reviewed and highlighted in this article.

Do you hold Restricted Stock Units (RSUs) that are about to vest, or have recently vested? That probably means you’re a valued employee, so congrats on that. Still, vested RSUs are a taxable event in your life, as well as a financial planning conundrum: Are you better off hanging onto the vested company stock you now hold, or selling them, to reinvest the proceeds elsewhere? A common—and often correct—consensus is to sell the vested stock shares that originate from vested RSUs.

Employees who receive Restricted Stock Units (RSUs) as part of their compensation will have a number of things to consider. Tax implications, financial planning...

Some employers may allow you to choose how you receive your equity compensation. They may allow you to receive it all in NQSOs or all in RSUs or they may allow you to...

Restricted stock is often considered the simplest type of equity compensation to understand. And relative to other types of equity you could receive, this might be true. But that doesn’t mean managing restricted stock is easy. Restricted stock gets complicated thanks to factors such as double triggers, tax withholding (or lack thereof), and sell-to-cover or...

Restricted stock units are often considered the most straightforward type of equity compensation. Unlike other ways that employees can receive shares of company stock, restricted stock units (or RSUs) often have a largely automated process for granting, vesting, and taxation. Once vested and settled, the fair market value of the RSUs is taxed and the...

If you work for a private company and receive restricted stock units as part of your compensation package, that equity compensation may have a double-trigger provision. While not all restricted stock units, or RSUs, come with this feature, it’s an important element to understand. What Are Double-Trigger RSUs? Double-trigger restricted stock units are those that...

Restricted stock units are often offered as part of a compensation package to attract and retain key employees   They are restricted in that certain requirements must be met before the employee can obtain full ownership rights to the value of the units. Receiving your RSUs is usually contingent on staying employed with the company for a certain period of time, which is why the units come with a vesting schedule. Before they vest, RSUs are...

Restricted stock units are commonly used as a compensation tool by employers who want to reward and retain key employees. co If you’re on the receiving end of restricted stock units, or RSUs, you could be set to financially benefit if you meet specific conditions set by your employer. The requisite condition is often staying employed with your company for a stated period. If you meet the length-of-time condition, your RSUs vest and the value...

Restricted stock and restricted stock units (RSUs) are both commonly-used tools to attract and retain employees. While similar in feel, restricted stock, and restricted stock units are technically different instruments, the details of which go beyond the scope of this article. Both restricted stock and RSUs allow employees to potentially benefit financially if they meet the vesting requirements set by the employer. Often, those requirements mean staying with the company for a set period of...