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RSUs are "restricted" in the sense that employees do not own them until exercised, which defers the tax burden. Typically, a portion of the RSUs are withheld t
by matchagaucho 11y ago
RSUs are "restricted" in the sense that employees do not own them until exercised, which defers the tax burden.
Typically, a portion of the RSUs are withheld to cover taxes when exercised.
- zwily 11y agoYou don't exercise RSUs. RSUs are taxable as they vest. At my company, a portion of your vesting RSUs are sold every time to pay the tax on them, unless you provide some cash to pay the tax.
- superuser2 11y agoRight, I am interested in whether they would do this during the lockup period. It would seem that if employees were contractually obligated to hold their positions, selling to cover taxes wouldn't be allowed.
- DannyBee 11y agoYou know, i've never really delved into the details of this, but i wonder if it's only required to be withheld, not sold. That is, uber could withhold the right number of shares, and is selling them itself or repurchasing them and paying out the FMV. In any case, Uber has to pay the withholding, and i suspect they have no magic way around this.
- home_boi 11y agoWhat happens when private RSUs vest? Do companies withhold some RSUs and the government considers the tax bill paid by the withheld amount?
- redshirtrob 11y agoThat depends on the stock plan agreement. One possibility is to make an IPO a vesting requirement. This guarantees a public market to sell them into.
- superuser2 11y agoSure, but what about the lockup period between IPO and actual liquidity?