Equity, RSUs, and Stock Options: What to Actually Accept

When you receive a job offer abroad, especially in tech, a significant portion of your compensation may come in the form of equity. For many African professionals used to purely cash-based salaries, this is confusing territory.

Here is how to decode the equity section of your offer letter.

1. RSUs (Restricted Stock Units)

Common in publicly traded companies (like Google, Meta, Amazon).

• What they are: Actual shares of the company given to you over time.
• The Value: They are essentially cash. If you receive $100k in RSUs vesting over 4 years, you will get roughly $25k worth of shares each year, which you can sell immediately for cash.
• The Verdict: Highly valuable and reliable. Treat this as part of your guaranteed total compensation.

2. Stock Options (ISOs / NSOs)

Common in early-stage startups and private companies.

• What they are: The right to buy shares of the company at a fixed price (the "strike price") in the future.
• The Value: Inherently risky. They are only valuable if the company's valuation grows significantly and there is a "liquidity event" (an IPO or an acquisition). If the startup fails, the options are worth zero.
• The Verdict: Do not accept a lowball base salary just because you are offered options. Treat options as a lottery ticket, not guaranteed income.

3. The Vesting Schedule

Equity is never given to you all at once; it "vests" over time to keep you at the company.

• Standard Vesting: A 4-year vest with a 1-year "cliff".
• The Cliff: This means you get 0% of your equity for the first 11 months. On your 1-year anniversary, 25% of your total equity vests immediately. After that, it usually vests monthly or quarterly.
• What it means: If you leave (or are fired) before your 1-year anniversary, you get exactly zero equity.

Questions to Ask Before Signing

If offered options at a startup, ask the recruiter:

1. What is the current strike price?
2. What is the latest preferred valuation of the company?
3. What percentage of the company does this grant represent? (10,000 options sounds like a lot until you realize there are 100 million total shares).