Restricted stock units, or RSUs, can be a powerful component of an executive compensation package, but without a clear strategy, they can expose you to unnecessary taxes, concentration risk, and missed planning opportunities.
The first step is understanding your grant terms, including the grant date, vesting schedule, settlement mechanics, and any expiration or cancellation provisions.
Tax planning is especially important because RSUs are generally taxed as ordinary income at vesting.
Rather than automatically selling all vested shares, some executives may choose a phased approach that covers taxes first and then diversifies gradually in line with a broader portfolio strategy.
RSUs can also factor into estate and legacy planning, especially once shares are vested and integrated into a broader gifting or charitable strategy.