CoastEquity: Options vs RSUs Comparator for Coast FI Engineers

Should I go for RSUs or Options?

* Option 1: 5k options @ $21 = $105,000 cost to exercise all of it (meaning you have to pay $105k upfront + taxes to acquire the shares valued at $290k which is the RSU value). If you spend $27k to exercise year one's options on day one you'd end up with like 1250 shares valued at $72,500. You'd need to pay AMT or whatever (depends on the type of options) on the delta so like $45500k of implied profit so like $16k of taxes. Basically you'd need to spend $43k up-front in cash to hold your 1500 shares. * Option 2: 2824 RSU's @ $58 = $163,792 of value you'd receive over a few years. In year 1 let's assume you get $41k and your company does same day sales to cover your tax. You'd owe between 30-40% in income tax as it will be taxed as ordinary income so you'd end up with with like $27k of shares in your pocket after tax (like 460 shares per year). This all depends on your risk tolerance + speculation about your companies value in the future. If I was achieving all my financial goes and had extra cash, I would pick the option that gives me the most shares to hold onto without sacrificing my existing finances HOWEVER, It seems like your company did the math and made these two options pretty similar in value. **The TLDR is:** 1. Options = more risk + cash upfront, but with higher upside if company's value increases (but also more complicated tax situation that is annoying to deal with tbh) 2. RSU's = less risk, no cash upfront, still have upside with whatever you choose to hold (very straightforward tax situation) Based on the numbers so far I'd probably pick the RSU's tbh. If they gave you more shares with Option #1 then it would look better to a risk taker. In Option 1 you pay like $40k to have 1250 shares in year one. In Option 2 you do nothing and keep like 460 shares. My numbers are approximate, but if you took that $40k and just invested it elsewhere you'd probably come out pretty even. I'd only do the options if you see **extreme** upside in this company (like hypgerowth AI company) and you've got $40k burning a hole in your pocket. Another way to think about it. If this company were public today - would you spend $40,000 to buy its stock? If the answer is no, go with the RSU's and move on.

* Option 1: 5k options @ $21 = $105,000 cost to exercise all of it (meaning you have to pay $105k upfront + taxes to acquire the shares valued at $290k which is the RSU value). If you spend $27k to exercise year one's options on day one you'd end up with like 1250 shares valued at $72,500. You'd need to pay AMT or whatever (depends on the type of options) on the delta so like $45500k of implied profit so like $16k of taxes. Basically you'd need to spend $43k up-front in cash to hold your 1500 shares. * Option 2: 2824 RSU's @ $58 = $163,792 of value you'd receive over a few years. In year 1 let's assume you get $41k and your company does same day sales to cover your tax. You'd owe between 30-40% in income tax as it will be taxed as ordinary income so you'd end up with with like $27k of shares in your pocket after tax (like 460 shares per year). This all depends on your risk tolerance + speculation about your companies value in the future. If I was achieving all my financial goes and had extra cash, I would pick the option that gives me the most shares to hold onto without sacrificing my existing finances HOWEVER, It seems like your company did the math and made these two options pretty similar in value. **The TLDR is:** 1. Options = more risk + cash upfront, but with higher upside if company's value increases (but also more complicated tax situation that is annoying to deal with tbh) 2. RSU's = less risk, no cash upfront, still have upside with whatever you choose to hold (very straightforward tax situation) Based on the numbers so far I'd probably pick the RSU's tbh. If they gave you more shares with Option #1 then it would look better to a risk taker. In Option 1 you pay like $40k to have 1250 shares in year one. In Option 2 you do nothing and keep like 460 shares. My numbers are approximate, but if you took that $40k and just invested it elsewhere you'd probably come out pretty even. I'd only do the options if you see **extreme** upside in this company (like hypgerowth AI company) and you've got $40k burning a hole in your pocket. Another way to think about it. If this company were public today - would you spend $40,000 to buy its stock? If the answer is no, go with the RSU's and move on.

* Option 1: 5k options @ $21 = $105,000 cost to exercise all of it (meaning you have to pay $105k upfront + taxes to acquire the shares valued at $290k which is the RSU value). If you spend $27k to exercise year one's options on day one you'd end up with like 1250 shares valued at $72,500. You'd need to pay AMT or whatever (depends on the type of options) on the delta so like $45500k of implied profit so like $16k of taxes. Basically you'd need to spend $43k up-front in cash to hold your 1500 shares. * Option 2: 2824 RSU's @ $58 = $163,792 of value you'd receive over a few years. In year 1 let's assume you get $41k and your company does same day sales to cover your tax. You'd owe between 30-40% in income tax as it will be taxed as ordinary income so you'd end up with with like $27k of shares in your pocket after tax (like 460 shares per year). This all depends on your risk tolerance + speculation about your companies value in the future. If I was achieving all my financial goes and had extra cash, I would pick the option that gives me the most shares to hold onto without sacrificing my existing finances HOWEVER, It seems like your company did the math and made these two options pretty similar in value. **The TLDR is:** 1. Options = more risk + cash upfront, but with higher upside if company's value increases (but also more complicated tax situation that is annoying to deal with tbh) 2. RSU's = less risk, no cash upfront, still have upside with whatever you choose to hold (very straightforward tax situation) Based on the numbers so far I'd probably pick the RSU's tbh. If they gave you more shares with Option #1 then it would look better to a risk taker. In Option 1 you pay like $40k to have 1250 shares in year one. In Option 2 you do nothing and keep like 460 shares. My numbers are approximate, but if you took that $40k and just invested it elsewhere you'd probably come out pretty even. I'd only do the options if you see **extreme** upside in this company (like hypgerowth AI company) and you've got $40k burning a hole in your pocket. Another way to think about it. If this company were public today - would you spend $40,000 to buy its stock? If the answer is no, go with the RSU's and move on.