Technically you can't be "underwater" on RSUs, you just get less dollar value in shares than you were expecting. (Acknowledged that this kind of sucks but when FMV on your options is below your strike price they are literally completely worthless, which is what it means to be underwater, and this is a much worse scenario than taking a haircut on your RSUs!)
You can be underwater on RSUs if you have a lockout or blackout period for when you can sell. Uber had this problem [0] after their IPO.
If you factor in taxes, you could end up owing more in taxes than the shares are worth (ex: vest price is $10/ea, taxes are $3/ea, current price you can sell at is less than $3 == underwater).
I think Aurora employees were locked out for 180 days, but force to exercise options at IPO price.
This is pedantically correct, but in practical terms, if you got RSUs at any price in the last five years, they're still worth less than you were offered.
There is a huge difference between stock price being 20% lower than RSU grant price vs. 20% below option strike price. With options. If options are way out of the money, then they're worth a lot less than the RSUs.
Far from being pedantic: having underwater on options is very different from having RSUs worth less than they were in the past. If an individual were to liquidate one of each; the underwater option would have negative monetary value, whereas the RSUs will always have a positive value.
Never mind the convoluted tax implications of exercising options that are nominally not underwater, but whose stock has a lower value that at the time of granting.
