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Equity & Executive Compensation

The Big Question Special Edition: Restricted Stock Units (RSUs)

This special edition explains restricted stock units (RSUs): how they vest, why vested shares are taxed as ordinary income, and how to decide whether to hold or sell. It addresses the concentration risk of holding large amounts of one employer's stock and how RSUs fit into a broader financial and tax plan.

Cullen MartinJune 12, 2024The Big Question

This special edition explains restricted stock units (RSUs): how they vest, why vested shares are taxed as ordinary income, and how to decide whether to hold or sell. It addresses the concentration risk of holding large amounts of one employer's stock and how RSUs fit into a broader financial and tax plan.

Key takeaways

RSUs are taxed as ordinary income at vesting based on the share value that day.
Holding large amounts of vested company stock creates concentration risk in one company.
Selling vested shares to diversify is often a prudent risk-management move.
RSU decisions should be coordinated with your tax bracket and overall financial plan.

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Financial Planner · CFP®

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