RSU vs Stock Options

Anonymous

Guest
Just wondering thoughts on selecting RSUs or Options. I would go the option route if the stock price was below 50 but where it sits now I think RSU's are a better choice as I'm not sure where the stock price will be in 3 years. I don't buy the yahoo target in the high 60s.
Thoughts? Thanks in advance.
 


















you will need to wait 3 years for the expiration date either way, the restricted stock you will pay taxes immediately at the end of 3 years. I recommend tradable, you will pay taxes when you sell. If the stock responds you have a chance of making a nice profit with tradable. Just my opinion.
 






Options are a risk. Your given the price the day they are granted. The only way they are worth anything is if the stock price goes up. My opinion is that options are only a good choice if you work for a new company or somewhere with expected huge future upside. A very large, relatively stable company is not somewhere you would expect to make much from options. You're gambling on the stock market.

RSUs are real money. No matter what the grant price is, you will have some cash net when you exercise RSUs. If it is a gain from the grant price, you'll pay capital gains taxes. If it is a loss, that also impacts capital gains taxes. Unless there is no company left, the RSUs are real. For a larger company, this is what I choose.
 






Agree that RSU are better...in fact when its time to exercise/cash them in, you pay the gains out of the grant, meaning it doesn't cost you anything out of pocket...also, once you are vested with them they start to produce dividends in April, which is a couple of hundred dollars...
 






RSU - options will be better if you believe the NVS stock will be over $80 when you trade.

I receive RSU a few years ago and they are worth almost $10k, if I had gone the options route, just over $1000. My belief wasthat with all of the gov't intervention into pharma and the worsening economy and a pipeine that wasn't performing, the options seemed way too risky. Even if the stock drops by 50% I still have value in RSU.
 






Either way, you'll never see a dime. Once you are too old, making too much money or your DM's nutsack is on the wrong side of his shorts, you are gone. Zero RSUs = no cash.