RSUs

I’m of the opinion that you should sell your RSUs as soon as they vest.  RSUs are restricted stock units.  Basically, they’re a way for your employer to give you money but not give you money.  They’re a way for them to give you a carrot to make you want to stick around.

For example, I got a letter from my employer telling me I got a grant of a few hundred stock units.  Happy day!  This was back in November.  I kept waiting for them to show up in my account.  I read the fine print and found that they would be released in January after the compensation committee approves them.  These units usually vest over a period.  In the past I’ve seen it so that it vests every 6 months, or sometimes it vests every year.  So that means if this goes through and its a 6 month plan, then I won’t actually get the money until 6 months from now, and that’s only if I sell them.

Since you already get taxed for them when you buy them then it makes sense to just sell them immediately.  Look at it this way:  If you were given a bonus, would you just put it all in your own company’s stock?  Your answer may be yes.  Mine is not.  I think my company has great prospects, but I’d rather diversify it.  This limits my risk and lets me put the money to work in other places.