How to Negotiate Equity: RSUs, Stock Options, and What Actually Matters

When it comes to tech compensation packages, equity can be a nightmare to negotiate. That’s because equity structures are complex and require more than a quick glance to understand. In Europe, things get even more complicated - equity structures differ significantly from those in the US.

So, let’s start with the basics. You’ve got two main types of equity structures: stock options and restricted stock units (RSUs). Stock options give you the right to buy shares at a fixed price, but they come with a vesting schedule that can be brutal if you leave the company too soon. Typically, that’s a 4-year vesting schedule with a 1-year cliff - leave in month 11, and you’re out of luck. And then there’s the exercise cost, which requires capital.

In the EU, options are often structured as tax-advantaged schemes, but the tax treatment varies by country and whether you’re an employee or contractor. So, when evaluating options, you need to ask tough questions. What’s the current company valuation and strike price? What percentage of the company does your grant represent? What are the terms for exercise if you leave? Some companies now offer extended windows of up to 10 years, which is a big plus.

RSUs, on the other hand, are a promise to grant you actual shares at a future date, contingent on continued employment. They have value as long as the company has value, and they don’t require an exercise price. RSUs are often more common at later-stage companies because they’re simpler to understand and value. No exercise cost for the employee, less dilution optically… but also, a significant tax catch: RSUs are typically taxed as ordinary income in the year they vest.

When evaluating an equity offer, the most common mistake is taking the number of shares or options at face value. You need to calculate the percentage ownership and implied value. What are the total shares outstanding, fully diluted? What’s the current 409A or FMV valuation? What’s the percentage ownership? And don’t forget about the preference stack - if there’s significant preferred stock with liquidation preferences, common shareholders get paid last in an acquisition.

So, what should you negotiate? More shares, obviously - but also a lower cliff or no cliff, an extended post-departure exercise window, refresher grants, acceleration clauses, and valuation transparency. For roles at European startups, it’s often better to treat equity as potentially meaningful upside rather than the core of your compensation. Negotiate the base salary and benefits as if equity doesn’t exist; consider equity as what it is - a lottery ticket with varying odds.

Xeito’s salary intelligence can be a huge help in figuring out what’s a fair offer. With real market data for your role and experience level across Spain and Europe, you’ll know what to aim for before you even sit down to negotiate. And when you’re ready, you can find roles at companies offering competitive total compensation packages with Xeito’s job search feature. Now, go negotiate that offer - and don’t let the equity talk scare you off.

Want the numbers for your situation? Try the Xeito remote-salary calculator — compare net take-home and cost of living across European tech hubs in 30 seconds.

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