RSU Basics: Complete Guide to Restricted Stock Units
It all begins with an idea.
Table of Contents:
What Are Restricted Stock Units?
How Do RSUs Work?
RSU Vesting Schedules and Timeline
RSUs vs Stock Options: Key Differences
Tax Treatment of RSUs
When Are RSUs Taxed?
RSU Cost Basis and Capital Gains
Pros and Cons of RSUs
RSU Best Practices for Employees
Common RSU Mistakes to Avoid
Restricted stock units (RSUs) represent a company’s promise to give you shares of stock at a future date, provided you meet certain conditions. Unlike stock options, which give you the right to purchase shares at a set price, RSUs convert directly into shares once they vest. The name of this equity option refers to both the contractual nature of the grant and the time-based restrictions that typically govern when you receive the shares.
However, RSUs are more than just deferred compensation. They function as retention tools, aligning employee interests with company performance while providing predictable value even in volatile markets. A 2024 survey by the National Association of Stock Plan Professionals found that RSUs have become a popular form of equity compensation, offered by 95% of companies that offer service-based full value awards.
In a way, RSUs are unfunded, unsecured promises. You hold no shareholder rights — no voting power, no dividends — until the units vest and convert into actual shares. This distinction matters for both financial planning and tax purposes. The company essentially owes you shares in the future, but those shares remain company property until vesting conditions are satisfied.
Material risks accompany RSU grants. Company bankruptcy could render RSUs worthless, as you rank as an unsecured creditor. Share price declines between grant and vesting reduce the value you ultimately receive. Additionally, vesting triggers immediate tax obligations regardless of whether you sell the shares, potentially creating cash flow challenges.
Blog Post Title Two
It all begins with an idea.
It all begins with an idea. Maybe you want to launch a business. Maybe you want to turn a hobby into something more. Or maybe you have a creative project to share with the world. Whatever it is, the way you tell your story online can make all the difference.
Don’t worry about sounding professional. Sound like you. There are over 1.5 billion websites out there, but your story is what’s going to separate this one from the rest. If you read the words back and don’t hear your own voice in your head, that’s a good sign you still have more work to do.
Be clear, be confident and don’t overthink it. The beauty of your story is that it’s going to continue to evolve and your site can evolve with it. Your goal should be to make it feel right for right now. Later will take care of itself. It always does.
Blog Post Title Three
It all begins with an idea.
It all begins with an idea. Maybe you want to launch a business. Maybe you want to turn a hobby into something more. Or maybe you have a creative project to share with the world. Whatever it is, the way you tell your story online can make all the difference.
Don’t worry about sounding professional. Sound like you. There are over 1.5 billion websites out there, but your story is what’s going to separate this one from the rest. If you read the words back and don’t hear your own voice in your head, that’s a good sign you still have more work to do.
Be clear, be confident and don’t overthink it. The beauty of your story is that it’s going to continue to evolve and your site can evolve with it. Your goal should be to make it feel right for right now. Later will take care of itself. It always does.
Blog Post Title Four
It all begins with an idea.
It all begins with an idea. Maybe you want to launch a business. Maybe you want to turn a hobby into something more. Or maybe you have a creative project to share with the world. Whatever it is, the way you tell your story online can make all the difference.
Don’t worry about sounding professional. Sound like you. There are over 1.5 billion websites out there, but your story is what’s going to separate this one from the rest. If you read the words back and don’t hear your own voice in your head, that’s a good sign you still have more work to do.
Be clear, be confident and don’t overthink it. The beauty of your story is that it’s going to continue to evolve and your site can evolve with it. Your goal should be to make it feel right for right now. Later will take care of itself. It always does.