Restricted Stock Units vs Stock Options
What’s the difference between Restricted Stock Units and Stock Options?
With RSU, you typically receive stocks or cash equivalent after vesting period. The benefit is, even if a share price drops after a vesting period, you will still receive some value. The drawback is that you have to pay a marginal tax rate on that benefit.
With stock options, you have a right to buy shares at an exercise price. The drawback is that if the current price is below the exercise price, then those options are worthless. The benefit is if those are worth more than the exercise price then you may qualify for 50% employee stock option deduction which means only half of the benefit will be taxed.
If you have any questions about the differences between Restricted Stock Units and Stock Options call TTE Bookkeeping Services today!