Under the standard GAAP accounting rules, stock-based compensation is a non-cash expense on the company’s income statement. So even though it appears the compa

Under the standard GAAP accounting rules, stock-based compensation is a non-cash expense on the company’s income statement. So even though it appears the company isn’t actually paying anything when it issues new stock grants to employees, from an accounting POV the company is paying for it all. (This is why so many growth tech companies report non-GAAP income. The amount of stock-based compensation tends to be so large that it overshadows any profit from product revenue, and executives understandably would rather talk about their margins and retention rates than how expensive RSUs are.) I don’t know how this affects the tax situation. I would assume that since the RSUs are already booked as an expense, the company can sell 40% of them to get cash, and use that to pay the employee tax withholdings, with no effect to the employee.