Restricted Stock Unit (RSU)

A restricted stock unit (RSU) is a form of compensation that gives an employee the right to receive a certain number of shares of a company's stock, but only after meeting certain conditions. These conditions typically include staying with the company for a certain period of time and meeting performance goals.

RSUs are often used by companies to attract and retain top talent. They can also be used to reward employees for their contributions to the company's success.

When an employee is granted an RSU, the company will typically record a liability on its balance sheet equal to the fair market value of the shares at the time of grant. This liability is then reduced over time as the employee meets the vesting conditions.

When the RSUs vest, the company will issue the employee the shares of stock. The employee will then have to pay taxes on the value of the shares at the time of vesting.

RSUs can be a valuable form of compensation for employees. However, it is important to understand the terms of the RSU grant before accepting them. Employees should also be aware of the tax implications of RSUs.

Here are some additional details about RSUs:

• RSUs are typically granted to employees as part of their compensation package. They can also be used as an incentive for employees to achieve certain goals.
• The number of RSUs granted to an employee will vary depending on the company and the employee's position.
• RSUs typically have a vesting period, which is the amount of time an employee must work for the company before they can receive the shares.
• The vesting period can be either a fixed period of time or a performance-based period.
• During the vesting period, the company will typically record a liability on its balance sheet equal to the fair market value of the shares at the time of grant. This liability is then reduced over time as the employee meets the vesting conditions.
• When the RSUs vest, the company will issue the employee the shares of stock. The employee will then have to pay taxes on the value of the shares at the time of vesting.
• RSUs can be a valuable form of compensation for employees. However, it is important to understand the terms of the RSU grant before accepting them. Employees should also be aware of the tax implications of RSUs.