

Ask HN: Why don't more startups pay equity in form of RSUs? - shubhamjain

So my understanding is that stock options carry a considerable amount of risk of expiring worthless. You have to be lucky, to get options at low strike price and stay in the company till it goes for acquisition or gets IPO-ed to gain anything significant, or unless, you get them from companies like Pintrest which will allow you to exercise them, 7 years after leaving the company [1].<p>Restricted Stock Units (RSUs) seems a lot less riskier since they would always be something of value, irrespective of how soon the company gets acquired or how soon employee leaves the company (of course, taking account of the vesting period). But this type of equity grant seems a lot less common. Is there any reason why?<p>[1]: http:&#x2F;&#x2F;www.businessinsider.in&#x2F;Pinterest-just-made-a-deal-with-employees-that-could-rock-the-startup-world&#x2F;articleshow&#x2F;46670004.cms
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fragmede
Stock options are cheaper for the company, and it's as simple as that.

The company giving out options doesn't need to pay taxes on them, while RSU
are considered compensation which requires taxes to be paid by the company.

