Stock options question
Have offers from two start ups in which work on ML/AI for SD networks. A: Base 140k Options: 10000 stocks, current stock price $4 B: Base 160k RSU: 400k/4y Please help me evaluate A. Does the strike price vary over 4 years? Are these usually put options or call? Is it worth pursuing these offers? Current TC/role:235k(base: $155)/ SDE yoe: 6.5
strike price is fixed but it won’t be included in your offer letter. You need to check with ur recruiter for the most recent price. Also the read helps: https://blog.wealthfront.com/409a/
If I'm reading your numbers correctly, it's B, hands down. A is offering you the chance to buy 10,000 shares in of stock in the future at today's price. If the stock value triples, you make $80,000. If the stock is flat or goes down, you get nothing. B will give you $400,000 of stock over 4 years (if the stock stays flat and if your 400k means "$400,000 worth at today's price").
wrong. both offers are worth $0. offer B is better because the actual cash is $20k higher
B is better unless A literally goes 12X in 4 years. Have to take tax treatment into account as well.
The strike price is set at time of award, usually a few months after you start. That said while the strike price is fixed, the intrinsic value will vary based on current market value and the spread. RSUs on the other hand are typically issued on a value basis, which is a function of the last 30 day average.
Thanks! Usually, Is the strike price over the current value of the stock or under?
If the company is Pre-IPO it’s going to be based on the most recent 409a valuation. Otherwise it’s probably going to be the price the underlying instrument is trading at on the day of award.