Understanding RSU

New / Eng
akHakb

New Eng

PRE
IBM
 akHakb
Jan 3 28 Comments

I'm new to this tech TC breakdown. I understand that the base salary is the cash money you'll get each month. Bonus is usually at the end of the year.

However, I'm confused about RSUs. Let's say I get a job at a publicly traded company and I get 50k RSU per year. Does it mean I can cash it at the end of each year? What does this mean? thanks

TC: 0 (grad student applying for jobs)

28

comments

Want to comment? LOG IN or SIGN UP
  1. TOP
  2. RECENT
  3. OLD
 TOP 28 Comments
  • It depends of the company policy, the most common is to get 25% after a year, and the remaining quarterly. Keep in mind that a good % of your vested grant will be to pay taxes 😂
    Jan 3 5

    • Flagged by the community.

    • Many companies do not automatically tax at the full rate when you vest. It's on you to determine the difference, if there is one, between what they took out and what you owe, and pay that yourself.

      Many companies apply a standard income tax rate of 22% that you can adjust if you know how much should be taken out. That will save you having to deal with it.
      Jan 3

  • Flagged by the community.

    • New / Eng
      akHakb

      New Eng

      PRE
      IBM
       akHakb
      OP
      oh okay, this makes sense. thank you!
      Jan 3
  • Apple
    kFJD45

    Go to company page Apple

    kFJD45
    RSU aka golden handcuffs is a promise from your employer that you would be given x number of stocks as per the vesting schedule. You are free to do whatever you want to do with the vested stocks (keep them for long term capital gains/losses) or sell them as soon as they are vested (taxed as normal income).
    Vesting period varies across different companies. E.g. Apple stocks are vested over 4 years and has simple divided by 8 formula (in most of the cases) i.e. you will given 1/8 of the promised stocks every six months. For your case, you will receive 25k worth of stocks every six months.
    Hope this helps
    Jan 3 4
  • Apple / R&D
    leiferiksn

    Go to company page Apple R&D

     leiferiksn
    Yes and no. It vests in 4 years but if you’re getting 50k per year I would include that in TC. For instance. Let’s say you make 100k base salary+50k RSU per year then TC=150. But if you only get 50k RSU once, then you’re TC would be 112k.
    Jan 3 4
  • New / Product
    622881

    New Product

     622881
    What are refreshers, and when/how often are they offered?
    Also, is any of this related to a ‘cliff’ or ‘strike price’?
    Same boat as OP here
    Jan 3 2
    • Apple
      kFJD45

      Go to company page Apple

      kFJD45
      Refreshers are generally annual (or off cycle in some cases) bonuses handed out to you to keep the pipeline filled with stocks.
      Cliff is when your TC is same for two consecutive years.
      Ideally, companies will do their best to avoid the cliffs in your TC if they consider you a good employee. For high performers, companies will try to put really strong golden hand cuffs
      Jan 3
    • New / Product
      622881

      New Product

       622881
      Thanks
      Jan 3