GLOSSARY · INVESTING
Restricted stock units (RSUs)
A promise by an employer to give you company shares once a vesting condition, usually continued employment, is met. When the shares vest, their market value is taxed as wages whether or not you sell them, and employers usually withhold some of the shares or cash for tax. Later growth or loss after vesting is a capital gain or loss.
Also called: RSU, RSUs, stock units
FORMULA
Wage income at vesting = shares vested × market price on the vesting date
COMPUTE IT WITH YOUR NUMBERS
LEARN IT PROPERLY
CHAPTER · GROWING YOUR PRIMARY INCOME · STRATEGIESTotal Compensation: Valuing the Whole PackageRELATED TERMS
SOURCES
- Publication 525, Taxable and Nontaxable Income. Internal Revenue Service.