Asking for a friend (YOE: 0). Confluent has given two options:
1. 5050 RSUs with 4 year vesting
2. 10100 stock options with 4 year vesting
Which one should be preferred?
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comments
The fact that they are offering both... signals to me that they are less confident of a home run with IPO. Cos why not just give everybody RSUs and if they are confident of the upside engineers will flock and those hired will stay longer.
With options, the burden of decision is being put on the employee who has no access to the information the board has.
In this case... since the no of options is 2x... the diff between the expected share price at IPO and the grant price will have to be at least half of the total value of the share for u to make the same money as RSUs.
eg. IPO price- $10. Grant price $5.
Money with options (10-5) * 10100 = 50500
Money with RSUs also $10 * 5050 = also 50500
So if the grant price was less than half say $3 then u would be better off with options.
If the strike price is say $7 for the same case... u only make $30300 with options but would have made ~$35k with RSUs
Obviously what the IPO price will be is a guessing game.
Just ask for more RSU.