Hi folks, I have some questions about rsu. My understanding is that during the offer period the new company will offer some money lets say 100k as rsu for 4 years. So after each year I will take stock with the value of 25k 1. Is my understanding correct? 2. Every time i take the 25k stock, this will be based on which stock price? The price during the offer period or the price at this time? 3. My understanding that this 25k is considered as income, so if I X% as taxes from each paycheck then the money will be used to buy the stocks will be (1-X) * 25k, right? 4. There is something called refresher. What is it and does every company that has rsu pays it? 5. What will happen after the 4 years? Am I getting a new rsu or there no more? In other words will the 100k be repeated? 6. Is the rsu based on the performance? 7. If I am getting rsu, can I buy stocks on my own from any broker? 8. If the company offers rsu, will it also have espp? Thanks
1. Yes 2. Usually the number of shares is decided when you join the company based on the stock price. Then every year you get 1/4 of the shares. 3. For each slot of shares there is a vest date. You will pay the incoming tax for the value on the best day. You pay the capital gain/loss between your sale price and the best price.. 4. Refresher usually is stocks granted to you every year, and vested 1/4 per year. Not every company has it. Actually most dont. 5. In companies like Google, Facebook, the refreshers each year aggregated so after 4 years you still have ray. But of course you have most rsu in the 4th year as you have initial grant and all refreshers.
5. Some companies like Facebook, Google will grant additional rsu based on performance to make up the loss after 4 years. Very few people get it. 6. Refreshers are related to performance. Initial grant is not. 7. Yes. But you may only do it in oening trading window for stock of your company. No restriction on other stocks. 8. Depends. I think for companies offer rsu most dont have espp.
Thank you guys for the explanation
Another question if the price of the stock increased or decreased this will not affect the count determined during the offer, right?
Got to shout out to @srouji @fb2019 for helping a new friend so patiently. I agree with their answers, for most of the companies.
Some companies, like Intel, take care of taxes for your RSU. Let’s say after one year you have 100 shares vested. Intel will take certain amount of RSU from that 100 (~33), take care of the taxes for you. Whatever is left it’s yours. You will still need to pay tax on a gain though.
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When you join your 100k over 4 years would be converted into x number of stocks over 4 years based on the grant date. So you would be gives x/4 number of stocks every year. Lets say that is y. So .33y number of stocks would be deducted for taxes (approx). Espp depends on individual companies, You can check with your recruiter if your company participates in it. Refreshers are performance and level based mostly. Every year you are again given certain dollars worth of shares vesting over 4 years. So traditionally your 4th year is your best year ( you can do that math). 4th year onwards it would depend on how good your refreshers were, did you get a promotion etc etc. You can check with your recruiter if you can buy stocks with a broker or not.
So does apple have espp or just rsu?
Both.