Say it like this
- My RSUs vest over four years
- The company offers 50,000 RSUs as part of the signing bonus
- I will receive my RSU grant next month
Use it at work
Offers
- The offer includes RSUs vesting over four years.
- How many RSUs come with this level?
Understanding
- RSUs are taxed when they vest.
- My first RSUs vest next month.
Comparing
- RSUs have value even if the stock price drops.
- Would you prefer RSUs or options?
Don't say this
RSUs are restricted until vesting; you do not own the shares immediately upon grant
Don't mix it up
| Term | What it is | Who writes or uses it | When |
|---|---|---|---|
| RSU | Shares given to you over time | Public or large companies | Offers |
| stock options | Right to buy shares at a set price | Startups | Offers |
| equity | Ownership in general | Everyone | General term |
Practice
Try it
4 quick exercises
1. You are explaining your compensation package to a friend. How would you naturally say it?
2. My job offer includes 10,000 _______ with a four-year vesting schedule.
3. Which sentence uses RSU incorrectly?
4. Rewrite in natural tech English: The organization gave me shares that I cannot sell until after a waiting period, and the price is set by the stock market value at the time they become available.
Say it out loud
Phrase 1 of 3
"My RSUs vest over four years"
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More about RSU
Real examples(3)
- in a salary negotiation
"The offer includes a base salary of 150,000 dollars plus 20,000 RSUs vesting over four years."
- in a team conversation
"Once my RSUs vest, I can sell them and diversify my investment portfolio."
- in an HR discussion
"Your first batch of RSUs will vest in one year, with the remainder vesting quarterly thereafter."
More mistakes(2)
Handle with care. RSU is strictly a compensation term; do not confuse it with stock options or other equity awards. Only use when discussing restricted stock units specifically.
- ✕RSUs are the same as stock options✓RSUs are different from stock options because they have value regardless of stock price
Stock options only have value if the stock price exceeds the strike price; RSUs always have intrinsic value
- ✕I do not pay taxes on my RSUs✓I pay income tax on my RSUs when they vest based on their market value at that time
RSU vesting is treated as income for tax purposes in most jurisdictions
Other forms(3)
- RSU noun
"My RSU package is worth approximately 200,000 dollars over four years"
- RSUs noun
"The company grants RSUs to all employees at the senior level and above"
- RSU grant noun
"I am excited about my RSU grant in the new job offer"
Often used with(4)
- RSU vesting · the process of RSUs becoming actual shares over time; example: RSU vesting schedules are typically four years
- RSU grant · the initial award of RSUs to an employee; example: My RSU grant was announced in the offer letter
- vest RSUs · when RSUs convert to actual stock; example: My RSUs vest quarterly over a four-year period
- RSU value · the monetary worth of RSUs based on current stock price; example: The RSU value changed significantly after the earnings report
Similar words(2)
- equity compensation · broader term that includes RSUs, stock options, and other share-based awards
- stock grant · general term for any grant of company stock; RSUs are a specific type of stock grant
Opposites(2)
- salary
- bonus
Questions(6)
- What is the full form of RSU?
- RSU stands for Restricted Stock Unit. It is a form of employee compensation where a company grants you shares that vest over time, typically used by tech companies as part of salary packages.
- What does RSU mean in tech companies?
- RSU stands for Restricted Stock Unit. It is a form of compensation where your employer promises to give you shares of company stock after a vesting period. The shares are restricted until they vest, meaning you cannot sell or transfer them until the vesting conditions are met.
- How long do RSUs typically take to vest?
- Most tech companies use a four-year vesting schedule with a one-year cliff. This means you will not receive any shares for the first year, but after that, your remaining shares vest gradually, usually quarterly, over the remaining three years.
- Do I pay taxes on my RSUs?
- Yes, you pay income tax on RSUs when they vest. The taxable amount is calculated based on the fair market value of the stock on the vesting date. You do not pay capital gains tax at vesting, but you will pay capital gains tax if you sell the shares later at a higher or lower price.
- Are RSUs the same as stock options?
- No, they are different. RSUs have value based on the current stock price, while stock options only have value if the stock price rises above the strike price. RSUs are generally considered more valuable for employees because they have guaranteed value.
- Can I lose my RSUs?
- You can lose unvested RSUs if you leave the company before the vesting date. Once RSUs vest and convert to actual shares, they are yours regardless of whether you stay at the company.
