In a technology job offer, how does an RSU grant differ from a stock option grant?

## Two different promises Both appear in offers under the single word *equity*, and they behave differently enough that confusing them can cost a candidate real money. **Restricted stock units (RSUs)** are a promise of shares. Each vesting date transfers units to you at no purchase price. Because you paid nothing, the units carry value as long as the shares carry any value at all. Their downside is dilution of value with the share price, not the possibility of being worth exactly zero while the company thrives. **Stock options** are a promise of a *purchase price*. The grant fixes a **strike price** — the amount you will pay per share if you choose to buy. Vesting gives you the right to exercise; it does not give you shares. Your economic value is the spread between the share's worth and the strike, multiplied by the vested count. If the share is worth less than the strike, the option is **underwater** and exercising would be irrational. Options can therefore go to zero while the company still exists. In the United States, options come in flavours — commonly incentive stock options and non-qualified stock options — that are taxed differently from one another. The distinction is real, but the details are jurisdiction-specific and change; treat the flavour as a question for a tax professional in your own country rather than something to settle from an offer email. ## Reading each one off the vesting table Work the same artefact for both: the grant's vesting table, read row by row. For an RSU grant, an illustrative table for a mid-level machine-learning infrastructure role might show 5,760 units over four years, 1,440 at the twelve-month cliff row, then 120 a month. The invented figures show the shape only — they are not market data, and your own benchmark for your level and location should replace them. Each row means shares arriving. For an option grant, the identical table means something narrower: each row means *permission to buy* 120 shares at the strike. To know what a row is worth you need three more facts the table does not carry — the strike price, the current value of a share, and the cash you would need to buy. And one fact that determines whether the rows survive your departure at all: the post-termination exercise window, which is worth marking on the table beside the cliff row. ## What each grant type makes you ask **For RSUs:** - Is this a public company, where vested units are typically shares you can hold or sell subject to trading policy? - Or a private company, where release commonly requires a *second* condition — usually a liquidity event — in addition to time? Double-trigger units that have satisfied only the time trigger are not yet anything you can use. - Does the plan cover the tax withholding by selling or holding back part of each vesting tranche, which reduces the units that reach you? **For options:** - What is the strike, and what is the most recent valuation of the common stock it was set against? - How many shares is the grant, and how many shares are outstanding in total? - How long do I have to exercise after leaving, and roughly what would exercising cost me in cash? ## Tax shape, stated carefully The honest general statement is this: the two types tend to create a taxable event at *different moments* — commonly at vest for RSUs and at or after exercise for options — and the amounts, rates and filing mechanics vary by country, by state or region, and by the specific option flavour. That is enough to know that they are not interchangeable and that an options exercise can create a bill in the same year you spend cash buying the shares. Anything more precise than that is personal tax advice, which depends on your own residence and circumstances, and belongs with a qualified adviser rather than a study page. ## Anti-patterns The error that costs the most is reading an option grant as if it were an RSU grant — multiplying the share count by a headline per-share number and calling that the value of the equity. That calculation ignores the strike you must pay and assumes the price never sits below it. The mirror error is dismissing options as worthless; a low strike at an early-stage company can be the most valuable part of an offer. The correct posture is neither, it is to ask which instrument you have been given and price it on its own terms.