Restricted Stock › Restricted Stock Units

Presented by the editor-in-chief of myStockOptions.com, this engaging video covers the fundamentals of restricted stock, restricted stock units (RSUs), and performance shares to help you make the most of these grants. This video covers key concepts, such as vesting schedules and understanding your grant's value. Running time: 4:37

Video included! The taxation of RSUs generally resembles that of restricted stock but carries some important differences.

Hiring competition, the Great Resignation, and market volatility are prompting changes in longstanding stock comp practices for key performers at big, established tech companies such as Amazon, Apple, and Google.

Podcast and video included! 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.

Grants of restricted stock units (RSUs) can be structured to include a feature that lets you elect to defer the delivery of the shares at vesting and therefore also the taxes on the income recognized. This article explains how deferral features work in RSU plans and what you need to know before you elect to defer.

When markets are on a wild ride, stock volatility can rattle anyone's financial plan for equity comp and company shares. What should you do with shares acquired from equity awards now? Should you change your strategy or ride it out? This article provides a financial planner's insights.

Presented by the editor-in-chief of myStockOptions.com, this engaging video covers the tax treatment of restricted stock and restricted stock units (RSUs), including the tax rates, the timing of taxation, withholding, and the key points you must know after tax reform. Running time: 3:37

Podcast included! When a company is merging or being acquired, many employees are left wondering what will happen to their unvested RSUs. While the outcomes for holders of unvested RSUs and current equity holders will depend on the terms of the M&A deal, if your company is being acquired there are a few things you should know about your restricted stock units and what may happen.

Many companies have turned away from stock options and begun to make outright stock grants that must vest before the shares can be issued. For employees, these grants have added a new layer of complexity to their equity compensation. This article presents six questions I get all the time from clients who have received restricted stock, restricted stock units, or performance shares.

It's all about what leads to vesting or share payout...

The timing of taxation is different than that of stock options. You pay tax at the time the restrictions on the stock lapse. This occurs when...

When a company pays dividends on outstanding shares of stock, it can choose...

The compensation philosophies of companies are continually changing under the influence of many factors, from accounting rules to...

Starting with 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...

The differences between restricted stock and restricted stock units (RSUs) are significant enough to usually make one type of grant preferable to the other in a company's equity compensation strategy. The table below summarizes the reasons why. A more detailed discussion follows...

Surveys indicate that many companies use a variety of grants, including both stock options and restricted stock units (RSUs) in tandem. There are many possible reasons why a company might switch from options to RSUs...

The ability to delay the delivery of RSU shares (and thus ordinary income taxes) at vesting depends on whether your company has a provision for this in its stock plan. The deferral needs to be structured correctly, as otherwise it can lead to tax penalties. Deferral is not...

"Releasing" restricted stock is the process by which your company transfers or "frees" shares to you when...

Restricted stock units result in ordinary income to you. This occurs when...

You should definitely report a sale for taxes at vesting if you received a 1099-B that shows the proceeds. The IRS will...

You need to complete Form 8949 and Schedule D for the year of your stock sale and file them with your IRS Form 1040 tax return. You must...

Technically, different tax code sections apply, though under most grants the tax results are similar. With restricted stock you are taxed at vesting or earlier at grant if you make a timely Section 83(b) election. Most experts believe that with RSUs you cannot make...

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...

These retirement-eligibility provisions raise tax complications for both restricted stock and RSU grants, though the issues vary. For tax purposes it does not matter that you must actually retire to vest the shares. With restricted stock, taxation is triggered when the grant is...

A delay in RSU payout can occur. This depends on the reason for the acceleration, whether you are ending your employment with the company, and your position in the company...

While restricted stock or RSUs still have value even when a company's stock price is lower than the grant price (stock options would be underwater), any type of equity grant can be worthless if a company goes bankrupt. That is one of the many lessons of...

For restricted stock, it begins on the day after vesting, unless...

Restricted stock follows the tax rules under Section 83 of the Internal Revenue Code, while RSUs are taxed under Section 451 upon the actual or constructive receipt of the shares...

Section 409A on nonqualified deferred compensation has created uncertainty...

Receiving deferred stock units, or RSUs that let you delay the delivery of shares (and thus taxes) at vesting, depends on...

Within two business days of any grant, you file Form 4 electronically under the SEC's Section 16 rules. However, while the filing rules for these grants are similar, there are some important differences...

Section 162(m) of the tax code limits a public company's deduction for each "covered employee" in the year of income recognition to $1 million. In 2018, the Tax Cuts & Jobs Act (TCJA) eliminated...