I disagree that RSUs can be worth significantly more than cash because the recipient of the cash can use the cash to buy (unrestricted) stock units if he or she is optimistic about the stock.
The only reason I would agree with putting RSUs at a higher valuation is due to the vesting schedule - it often isn’t value now, but value in 2 years.
So obviously “cash now” vs “stock now” is equal as you point out, but “this much cash in two years” vs “the value of this much stock now, in two years” would make most people lean towards RSUs in that scenario. (Of course no one would really offer the former straight up, but I suppose thats what bonuses are)
True, but he or she implied it: if it weren't significant, it would be a disservice to the advice asker to distract him or her with the information.
When you are hired you are given a certain number of units based on your RSU package and the current stock price. Example: 400k package over 4 years, current stock price $1000. This means you get 400 units total or 100 vesting per year.
If the stock prices goes (up/down) the number of units do not change but the total value does. This could result in significantly (more/less) for your total compensation in a way that cannot be achieved by what you have described due to the timing differences in when cash from base pay becomes available.
One of the key benefits of RSUs is that they are priced and granted upfront and can appreciate (and earn dividends) before they vest.
A more concrete example: let's imagine you joined AAPL Jan 1, 2019 and were granted $100k in RSUs. You'd get 667 shares, and vest 83 shares every six months. If the stock doesn't move at all, that's the same as the additional salary (though salary is better since it's prorated evenly as opposed to bi-annual "bonuses").
Of course, the stock prices don't stay the same... and that's where the potential comes in. In the last year, AAPL has doubled. In that example, you would have vested 83 shares at $200 ($16,675) in the summer and 83 shares last week at $300 ($25k) vs. $25k salary in the first year.
In the same period, FB and GOOG have gone up 50%, AMZN has gone up 15%, NFLX (which doesn't do RSUs to my knowledge, only stock options) went up 6%. In all of those cases, you'd be better off in Y1 with the RSU grant.
Obviously, yes, there's downside risk to that too. The floor is still much higher tha stock options which can easily be worth nothing if underwater... but when you factor in that this is 20-50% of your total compensation, that upside/risk seems worth it.
Now it's worth mentioning that the stock could have also gone down, and frankly I am extremely skeptical of my own ability to predict this. So I wouldn't say I selected this offer based on the potential upside of the stock. But still, it's a nice upside.