The Company I am currently working with, as part of a reward program awarded me 500 stock options and given me an option to choose them either as
- Employee Stock Option
- Restricted Stock
- Or as a mixture of both
My Manager educated me that there are differences in both the above and I need to decide what I should opt for. What I understood was
Employee Stock Option: I would be given the entire stock option and can start exercising my option from second year onward. Each year I earn the right to purchase those shares over 4 years, in 25% annual increments.
Restricted Stock: I would only be given 1/4 of the stock option i.e. 125. I would earn the right to the shares based on a 25% annual vesting schedule.
Or as a mixture of both: I can also choose a fraction of the Stock as ESOP and a fraction as Restricted Stock, i.e. if I choose to equally split my stock, I would have 250 as ESOP and 62.5 as Restricted Stock.
What is the Optimal Strategy I can adopt to decide that will maximize my chance of gain.
- I have the historical market data of the Company
- The Company is US based
Few more details (that I realized are important and required to make a subjective answer)
- I am not a US Resident/Citizen (I am Indian)
- The Company is not a start-up, but a well known established U.S. based multinational computer technology corporation