Matt Simon
While restricted stock and RSUs are relatively straightforward, they have technical aspects you must understand to make the most of them. Learn the essential facts of restricted stock and RSUs, including basic concepts, vesting schedules, and tax treatment.
Richard Friedman
Your company may no longer be using stock options. Instead, it may be granting restricted stock, restricted stock units, or performance shares. While these grants don't carry the same upside as stock options, they have benefits you will surely appreciate once you understand their special features.
Bruce Brumberg and Kate Victory
Your company has awarded you restricted stock. Restricted stock grants carry their own requirements, which you need to understand before you can profit from them. In Part 1 we discuss the rules and restrictions of vesting and sale.
Matt Simon
Restricted stock units (RSUs) have become the most popular alternative to stock options. While RSUs share many of the same issues as restricted stock, there are differences, and it is important to understand the basics of RSUs in their own right.
Bruce Brumberg
myStockOptions.com
PowerPoint presentation (in PDF) that Bruce Brumberg, editor-in-chief of myStockOptions.com, developed for talks and meetings on restricted stock and RSUs. (Premium members may request permission to use it at their companies.)
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Don't confuse restricted securities and restricted stock. They are very different...
The compensation philosophies of companies are continually changing under the influence of many factors, from accounting rules to...
Restricted stock always has some value to you even when the stock price drops below the price on the date of grant...
Generally, yes, with two exceptions. First, with RSUs you cannot...
Starting with the broad grants of RSUs at Microsoft and Amazon, recent corporate practices and survey data suggest it is more likely that your company will grant you...
You have some decisions but fewer than you would with stock options, which prompt a decision about exercise timing and, if you hold the shares, require cash for the exercise and taxes. By contrast, restricted stock and restricted stock units...
The vesting of restricted stock, RSUs, or performance shares is separate from the sale of the shares. Whether you sell the shares at vesting depends on various factors, including...
Not in the way stock options can. Restricted stock is worth the full market value of the stock when it vests (or, with restricted stock units, when shares are delivered). It does not matter if...
Stock grants, such as options or restricted stock, are typically determined by the group or person that sets cash compensation levels and bonuses at your company. The full board, compensation committee, or authorized officer of the company then...
In most instances, stock grants are subject to the same types of practical limitations as negotiations for your cash compensation. For example, an employer may...
Though this varies from industry to industry and among peer companies, most companies use a combination of...
Some companies have more than one stock plan. When a company offers just one omnibus plan...
Depending on the type of equity award, a stock grant agreement can have one or several pages setting forth a range of terms for you to review, including...
Not for standard time-vested restricted stock. These grants do not have a term, as stock options do. The vesting of restricted stock depends on...
In a public company the shares are usually granted at no cost to you...
The calculation is simple. You multiply the number of shares you received by the...
Your grant is adjusted according to the split ratio that applies...
Although normally you cannot transfer them until vesting, shares of restricted stock are issued to you and are outstanding in your name from the time of grant. Most stock plans...
Instead of paying cash dividends, a small number of companies require...
Usually the shares are legended with the restrictions, and they are often...
A vesting schedule dictates when you may exercise your stock options or when the forfeiture restrictions lapse on restricted stock. A schedule is time-based if you must...
Yes. Vesting schedules provide for either "cliff" vesting or "graded" vesting...
Graded vesting is more common than cliff vesting. According to surveys, the most common vesting schedule for these grants is...
Unlike in some benefit plans, service for time-vested option and restricted stock grants is rarely...
Yes. You forfeit whatever stock has not vested. Exceptions can occur, depending on...
In short, yes, assuming this termination is made for good-faith reasons, such as business downsizing. Most employees are "at will," which means...
"Releasing" restricted stock is the process by which your company transfers or "frees" shares to you when...
The "lapse" is the end of the restriction that prevented the shares from vesting and being transferred to you. The lapse election is the method by which you choose withholding methods and what will be done with the...
Yes. After it vests, it is stock that you own outright like any other stock...
Whether you hold stock certificates, hold your shares in a brokerage account, or have an online trading account, you will need the assistance of a stockbroker...
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Tax errors can be costly! Don't draw unwanted attention from the IRS. Our Tax Center explains and illustrates the tax rules for sales of company stock, W-2s, withholding, estimated taxes, AMT, and more.
Test your knowledge with our Restricted Stock & RSUs quiz.
Listen to our new podcast on restricted stock and restricted stock unit basics!
Restricted Stock 101: Five Essentials Of Restricted Stock & RSUs 
