What is better, RSUs that take time to vest or options that you pay for at a discounted rate?For instance, Intuit will give 150k RSUs that vest over 3yrs but NFLX will allow a portion of my salary to buy options. I worked through a scenario where I had 100 RSUs and 100 options and the strike price was $100 and sell was $200 but it seemed the better deal was RSUs. It just takes takes more time. Am I missing something?
Are you saying the options don’t have a vesting period?
Netflix options have no vesting period
Also isn't there a limit on the ESPP options that you can buy every year. The last time I checked there was a limit like 25000 or something.
Motley fool has this " It's vital to decide how much you can comfortably contribute to your plan. Most employers cap contributions based on a percentage of your salary, and the IRS limits annual ESPP contributions to $25,000. Keep in mind that although shares are highly liquid, you'll sacrifice a chunk of your earnings in taxes if you decide to sell too soon, which is why you should not use your ESPP as an emergency fund."
RSUs are generally better but you can get significant leverage with options. Leverage cuts both ways.
Options are a longer term play. Netflix options have a 10 year expiration. If you're not immediately exercising them (which would be stupid) then there's far more upside because of the leverage. People here don't see options as a part of the income like you would for RSUs.
I never considered ESPP as options. Good public companies will give you RSUs and have an ESPP program.
Yes