Which statement is correct regarding equity awards with no strike price?

Which statement is correct regarding equity awards with no strike price?

• A. RSUs and PSUs have no strike price.
• B. Stock options have no strike price.
• C. Both stock options and RSUs have no strike price.
• D. All equity awards have a strike price.

Answer: (A)

The idea is whether you must pay to obtain the stock. Stock options have an exercise (strike) price set at grant, and you must pay that price to convert the option into shares. RSUs and PSUs are settled based on vesting and performance, and you receive shares (or cash) without paying a strike price. So RSUs and PSUs have no strike price, which makes that statement the right one. The other options misstate the role of strike price for stock options or equity awards in general.

The idea is whether you must pay to obtain the stock. Stock options have an exercise (strike) price set at grant, and you must pay that price to convert the option into shares. RSUs and PSUs are settled based on vesting and performance, and you receive shares (or cash) without paying a strike price. So RSUs and PSUs have no strike price, which makes that statement the right one. The other options misstate the role of strike price for stock options or equity awards in general.