HACKER Q&A
📣 thr_w_w_y

How to value stock options at a public company?


I've received offers for a SWE role from two companies that have each gone through an IPO in the past year. Both are comparable in terms of base salary and bonus, but while one company (Company A) offers a typical RSU grant, the other (Company B) is offering stock options instead of RSUs. This caught me off guard, and I could use some guidance in figuring out how to compare the offers.

All things being equal, I think Company B would actually be a better fit for me. I liked the people and the product better, and I'm a little more bullish on its future than Company A. I'm not opposed to taking on a little more risk in exchange for higher potential reward and more enjoyable work, but I'm unsure of what I should be asking for in order to make the offers more comparable.

To give a rough idea (apologies for the vagueness, trying to keep this anonymous), based on the number of options proposed in the initial offer, Company B's stock price would have to roughly triple in order for exercising/selling the options to be worth the same as company A's proposed RSU grant (assuming Company A's stock price stays flat). That seems awfully optimistic to me -- I feel like I'd need a much higher number of options to feel more comfortable that the added risk is worth it. But how can I figure out and justify how many options I think I should get? Are there other questions I should be asking the recruiter?

If anyone has any advice or resources about how to value options relative to RSUs, I'd really appreciate some direction on this. Thanks!


  👤 bluefirebrand Accepted Answer ✓
Imo, always value options at 0.

If you find a job that pays what you want and has options, that's a potentially nice perk.

If you find a job that does not pay what you want to but offers options to make up the difference, just be very aware that you're just gambling and there's always a chance you'll get burned.

Treat options like a nice perk and you'll always be ok. Same with the promises of performance bonuses or whatever. These are just levers that companies can adjust to try and make sure you are locked in there and don't leave.