Restricted Stock Units
Learn about RSU vesting, taxation, and planning strategies
Learning Library→RSUs
RSU Basics
Restricted Stock Units (RSUs) are a form of equity compensation where your company promises to give you shares of stock upon completion of a vesting schedule. Unlike stock options, there's no purchase involved - once RSUs vest, you own the shares outright (minus any shares withheld for taxes).
Typical RSU Lifecycle
- Grant: Company promises RSUs with a vesting schedule
- Vesting: You receive actual shares based on the schedule
- Taxation: Taxed as income when shares vest
- Holding: You can hold or sell the shares
- Sale: When you sell, any gains/losses are capital gains/losses
RSU Value
- The value of your RSUs is based on your company's stock price
- At vesting, the fair market value becomes your taxable income
- Most companies withhold shares to cover tax obligations
- The post-vest fair market value becomes your cost basis for future sales
- RSUs have value even if the stock price decreases (unlike options)
Important Note
Unlike stock options, RSUs are always worth something as long as the company's stock has value. However, they're typically subject to immediate taxation at vesting, even if you don't sell the shares.
Disclaimer
This information is provided for educational purposes only and does not constitute financial or tax advice. Tax laws change frequently and vary by jurisdiction. Please consult with a qualified tax professional regarding your specific circumstances.