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Can someone tell me what the rules are from companies who are already listed on NASDAQ and trading publicly? For example say if I join company X today (where X

by foo101 9y ago

Can someone tell me what the rules are from companies who are already listed on NASDAQ and trading publicly? For example say if I join company X today (where X could be Intel or Cisco or a similar company) and I have 40 RSUs vesting over 4 years. After 2 years I decide to leave X. 20 RSUs would have been vested. I clearly understand that I am going to lose the 20 unvested RSUs completely. My question is about the 20 vested RSUs. Is there a maximum time limit before which I must sell these 20 vested RSUs? Or can I keep these vested RSUs with me for life and choose to sell them whenever I wish? If it is indeed true that I can keep these vested RSUs with me for life, how exactly would I be selling these RSUs, say after 20 years? I mean, the company does not give me these RSUs directly on printed paper. The RSUs are held in an account in a website of a finance company such as UBS. I log into my UBS account to access my RSU details and sell them. What if UBS goes out of business in 20 years?

bsimpson 9y ago
They're your shares. They are held in an account sponsored by the employer, but they are yours just like if you bought them from schwab.com. I don't know what happens if a brokerage goes out of business, but I imagine you're in the same boat as all the people who bought those shares with cash on the open market. Once the stock vests, it's yours.
mertd 9y ago
All your granted shares go to your brokerage account. Those are insured by SIPC insured up to a limit. You can sell your shares whenever you want except for certain blackout dates around earnings if you are still employed by that company.
hkmurakami 9y ago
You can keep them in perpetuity. UBS is only holding those shares for you under your own name (a key distinction from having a structure where the shares are actually owned by UBS and you legally own a part of UBS' contract with you). In the worst case you can ACATS transfer your position to another brokerage (I did this with stock resulting from exercised options). I imagine there are federal laws regarding protecting your equity holdings (cash is more at risk than equity in this regard since they lend it away I think?)
- jdavis703 9y ago
  US banks are protected via FDIC insurance. In a similar manner your stocks are protected by SIPC insurance. They don't insure you against loss in value to the stocks. But if the firm winds up going bankrupt and somehow looses your stock, the CEO absconds with the money, they get hacked, etc, then you'll be protected up to $500,000.
ghaff 9y ago
Typically, when RSUs vest, shares (which you can sell just like any other shares) go into a brokerage account with some percentage of shares automatically sold to cover your estimated tax liability.

by foo101 9y ago

bsimpson 9y ago

They're your shares. They are held in an account sponsored by the employer, but they are yours just like if you bought them from schwab.com. I don't know what happens if a brokerage goes out of business, but I imagine you're in the same boat as all the people who bought those shares with cash on the open market. Once the stock vests, it's yours.

mertd 9y ago

All your granted shares go to your brokerage account. Those are insured by SIPC insured up to a limit. You can sell your shares whenever you want except for certain blackout dates around earnings if you are still employed by that company.

hkmurakami 9y ago

You can keep them in perpetuity. UBS is only holding those shares for you under your own name (a key distinction from having a structure where the shares are actually owned by UBS and you legally own a part of UBS' contract with you). In the worst case you can ACATS transfer your position to another brokerage (I did this with stock resulting from exercised options). I imagine there are federal laws regarding protecting your equity holdings (cash is more at risk than equity in this regard since they lend it away I think?)

jdavis703 9y ago
US banks are protected via FDIC insurance. In a similar manner your stocks are protected by SIPC insurance. They don't insure you against loss in value to the stocks. But if the firm winds up going bankrupt and somehow looses your stock, the CEO absconds with the money, they get hacked, etc, then you'll be protected up to $500,000.

ghaff 9y ago

Typically, when RSUs vest, shares (which you can sell just like any other shares) go into a brokerage account with some percentage of shares automatically sold to cover your estimated tax liability.