Welcome to the 1st edition of the Tech Financial Planning Newsletter.

In this newsletter, we will talk about what happens when they vest, the taxes associated, and what decisions you need to make.

TL;DR

• In general, when RSUs vest, you gain full rights and ownership

• When RSUs vest, you will owe taxes

• Your company will withhold taxes, but depending on your situation, you might still owe taxes at the end of the year

• To cover the tax withholding, you may consider a net, cash, or cashless exercise

• After they vest, you need to decide whether to hold on or sell them

Intro

Restricted Stock Units (RSU) are a form of compensation granted by a company to its employees. In general, when your RSUs vest, you acquire full rights and ownership to the value of the units. Typically, this is transferred to you in the form of your company’s stock.

RSUs can be a great part of your compensation, but it’s important to understand their impacts on your financial plan.