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Technically you can't be "underwater" on RSUs, you just get less dollar value in shares than you were expecting. (Acknowledged that this kind of sucks but when
by dweekly 4y ago
Technically you can't be "underwater" on RSUs, you just get less dollar value in shares than you were expecting. (Acknowledged that this kind of sucks but when FMV on your options is below your strike price they are literally completely worthless, which is what it means to be underwater, and this is a much worse scenario than taking a haircut on your RSUs!)
- itake 4y agoYou can be underwater on RSUs if you have a lockout or blackout period for when you can sell. Uber had this problem [0] after their IPO. If you factor in taxes, you could end up owing more in taxes than the shares are worth (ex: vest price is $10/ea, taxes are $3/ea, current price you can sell at is less than $3 == underwater). I think Aurora employees were locked out for 180 days, but force to exercise options at IPO price. [0] - https://www.cnbc.com/2020/08/28/nearly-200-uber-employees-sue-over-stock-price-decline-since-ipo.html https://www.cnbc.com/2020/08/28/nearly-200-uber-employees-su... [1] - https://www.google.com/finance/quote/AUR:NASDAQ https://www.google.com/finance/quote/AUR:NASDAQ
- CydeWeys 4y agoUnderwater is being used in this context to mean that the shares are currently vesting below their grant price.