Restricted Stock Units (RSUs) are a popular form of equity compensation that, after vesting, result in an employee’s receipt of shares of company stock or a cash payout. Similar to a bonus, RSUs can positively affect cash flow but incur taxes that require planning. Many of our clients have been (or will be) granted RSUs by their employers during their careers. It is important for these fortunate clients to develop an understanding of how these interests fit into their overall financial plan.
This checklist helps guide our conversations when advising clients regarding their RSUs. It covers:
Key characteristics of RSUs
Ordinary income tax considerations at vesting
Capital gains tax considerations at sale
Company stock and portfolio considerations