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Equity & Executive Compensation

General: Long-Term Incentives: Navigating the RSU Landscape

This video walks through restricted stock units (RSUs) as a long-term incentive: how they vest, how they are taxed as ordinary income at vesting, and how to manage the concentrated company-stock risk they can create. It helps employees turn equity compensation into a coordinated financial plan.

Jerry Davidse

This video walks through restricted stock units (RSUs) as a long-term incentive: how they vest, how they are taxed as ordinary income at vesting, and how to manage the concentrated company-stock risk they can create. It helps employees turn equity compensation into a coordinated financial plan.

Key takeaways

  • RSUs are taxed as ordinary income when they vest, based on the share price at vesting.
  • Accumulated RSUs can create concentrated exposure to a single company's stock.
  • A plan for selling and diversifying vested shares helps manage risk and tax exposure.
  • RSUs should be coordinated with your broader cash flow, tax, and investment plan.
More on Equity & Executive CompensationTax Planning

Written by

Jerry Davidse

Chief Executive Officer · CFP®

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