Merino Mindset
Practical Views on Money and Life
Does your company give you restricted stock units (RSUs) as part of their compensation package? But you're not sure what RSUs are or how they work?
RSUs are a great way to add extra equity to employees and give them a stake in the company. In a 2017 survey of 325 companies, 72% reported using RSUs in their compensation programs compared to only 37% a decade before. A shift towards companies providing a more comprehensive benefits package for their employees.
One of the perks of working with a company that offers benefits such as paid time off, health insurance, or a retirement plan, may come in the form of stock options. These are increasingly offered as you climb your career ladder at places like tech companies.
But what are stock options? And why should you care? Maybe this is a perk that you glance over because “you're not an investor.” Or the stock paperwork seems complicated.
However, stock options can be easy to grasp, and Merino Wealth wants to help you take control of this great financial benefit. Here is everything you need to know about them, and how you can use them to your advantage.
“When I started my job my company gave me equity compensation, but I don’t know what to do with it,” is a phrase I hear all of the time. Many times it’s followed by, “I really don’t understand this stuff. Please help me!” If this sounds like you then you’ve come to the right place. Our team frequently helps clients understand the types of equity-based compensation (like shares or stock options), taxes on equity compensation, how to value equity compensation, and much more.
Before making any financial decisions I think it’s important to have a basic understanding of what you’re dealing with. Our industry is full of confusing jargon. In the case of the term equity, there are actually two financial definitions.
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