How does a stock split affect my restricted stock/RSU grant?
Your grant is adjusted according to the split ratio that applies to the public shareholders. The split itself has no tax impact.
Example: You have 10,000 shares of restricted stock with a market price of $30. Your company announces a 2-for-1 split. You now have 20,000 shares with a market price of $15. Your total value of $30,000 remains; you simply have more shares with a similar vesting schedule.
Your company does not send you a new stock grant agreement with revised numbers. Instead, the new figures will appear in your online and print statements. Once the grant vests, the impact of the split is similar to that with any stock you own.
Example: Your grant of 10,000 shares of restricted stock vested when the market price was $30 (your tax basis). A year later your company announces a two-for-one split. You now have 20,000 shares with a tax basis of $15. Your one-year holding period carries over to these shares.
Real-World Example: Amazon's 2022 Stock Split
In 2022, Amazon announced a 20-for-1 stock split. For stockholders (and those with RSUs), this increases the number of shares by 20, with a price decrease per share by 20. For details, see an article from the magazine Fast Company (Amazon’s Stock Is Splitting: What That Means For AMZN And Investors).
While the split doesn’t create any change in the inherent value of RSU grants, the lower stock price makes it easier for Amazon to specifically target employee compensation, according to an analysis at GeekWire (Amazon’s Stock Split: Here’s What Employees And Investors Need To Know). The article presents an example. Suppose Amazon intends to grant $7,500 worth of RSUs to an employee. With a stock price of about $3,000 per share, the grant would fall between two and three shares, making it hard to pinpoint the intended dollar value. However, with a stock price of about $150 per share, the intended dollar value of $7,500 is much easier to achieve and gives the grant a more meaningful share size (50 shares).
A few Q&As about the split’s impact on Amazon RSUs appears in an online forum at the website Blind.