What is a 'RSU'?

A restricted stock unit is compensation issued by an employer to an employee in the form of company stock. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Term of the Day | Words to Know Restricted Stock Unit (RSU) A restricted stock unit (RSU) is a form of compensation issued by an employer to an employee in the form of company shares. Restricted stock units are issued to an employee through a vesting plan and distribution schedule after achieving required performance milestones or upon remaining with their employer for a particular length of time. RSUs give an employee interest in company stock but they have no tangible value until vesting is complete. The restricted stock units are assigned a fair market value when they vest. Upon vesting, they are considered income, and a portion of the shares is withheld to pay income taxes. The employee receives the remaining shares and can sell them at his or her discretion. Read More » Related to "Restricted Stock Unit (RSU)" What to Know About Restricted Stock Units Restricted stock units can be an important part of an employee's compensation package. They are effectively an unfunded promise. Read More » How Restricted Stock and Restricted Stock Units (RSUs) are Taxed Find out how restricted stock and restricted stock units (RSUs), which are forms of executive compensation, work and how to deal with the tax consequences of them. Read More » SPONSORED BY INVESCO How to Build a Bond Ladder Bond laddering is a simple strategy commonly deployed by fixed income investors. Here's how to determine if it's right for you. Learn More » Restricted Shares vs. Stock Options: What's the Difference? Restricted shares and stock options are both forms of equity compensation but each comes with some conditions. Read More » Sign Up for 'The Express' Financial news doesn't have to be boring... make your mornings more enjoyable, for free. Check it Out » Related Definitions Vesting Vesting is a legal term common to employer-provided benefits that means to give or earn a right to a present or future payment, asset, or benefit. Read More » Employee Stock Option An employee stock option is a grant to an employee giving the right to buy a certain number of shares in the company's stock for a set price. Read More » Capital Gains Tax A capital gains tax is a tax on capital gains incurred by individuals and corporations from the sale of certain types of assets, including stocks, bonds, precious metals and real estate. Read More » 83(b) Election The 83(b) election is an IRC provision giving an employee or founder the option to pay taxes upfront on the fair market value of restricted equity. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2020, Investopedia, LLC, All Rights Reserved | Privacy Policy