What Do You Need to Know About RSUs?

There are a lot of things to understand about Restricted Stock Units (RSUs). Hear from Commas advisor Katelyn on what they are and the 3 key dates associated with RSUs.

“There’s a lot of things to understand and know about restricted stock units or RSUs but here’s some of the highlights. RSUs are awards of company stock, given to attain and to attract key employees. These can be used instead of cash bonuses or alongside of cash bonuses as a way to compensate their employees as part of the entire compensation package. There are three key dates associated with RSUs: the grant date, the vesting period, and the vesting date.

The grant date is the day that your company grants you shares of the RSUs. This doesn’t mean that you necessarily have that company’s stock yet, but they’ve given you your award and told you how many shares to an expect and over what period of time. Then comes into play the vesting period every company is different, but this is the amount of time that must pass before you actually get those shares. This could be a cliff vesting schedule or it could be gradual vesting schedule but it’s going to vary from company to company. The vesting date is when you become an owner of those shares so they’re no longer RSUs, but actual shares of the company and at this time you can sell them or hold them or do whatever you like. There’s a lot more to know and understand about RSUs, especially around the taxation of them so if you have any questions don’t hesitate to reach out to your advisor”