Restricted Stock Units
Definition
Restricted Stock Units: Restricted Stock Units are a promise to deliver shares upon vesting, with no purchase required. Unlike options, RSUs have value even if the stock price drops. They're taxed as income when they vest. RSUs are common in public companies but increasingly used by late-stage startups.
Example Usage
“When my RSUs vested, 40% were automatically sold to cover income taxes on the full grant value.”
Common Misconceptions
Related Terms
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Stock options give employees the right to purchase company shares at a fixed price (strike price) after vesting. Options are a common form of equity c...
Vesting
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Equity
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