- a simple definition of RSU's
- how to effectively utilize these? and yet,
- how to not let them be your golden handcuffs?
Holding shares in the same company that pays your salary for is not great from a risk-management point of view, so most people sell their shares as soon as they vest. You can reinvest the proceeds in a mutual fund or something.
Golden handcuffs only work if you let them. I make a habit of completely ignoring RSUs and acting as though they have no value. They play no part in my decisions about where to work or how I feel about the compensation package. If the salary is good I take the job, if not I go somewhere else. If the RSUs turn out to be worth something, then yay, it's a bonus! But most of the time they are not as good a deal as company recruiters would like you to think they are - if they actually were worth the cash equivalent a recruiter will quote you, the company would save themselves the trouble of managing the RSU program and just give you the cash instead. The company saves money by offering you RSUs because you will never be able to cash in on all of them - you will always walk away from the company with un-vested RSUs at some point. That's not a terrible thing, just don't let yourself count RSUs as real income until after they actually vest.
- the list of vesting events (including date and # shares)
- the current market price of the stock
You can use the above to calculate your future income at this job (after adding your cash salary and expected bonus). This will provide a benchmark against which to evaluate future job offers.
If you want to diversify your portfolio (rather than having a large part of your wealth linked to the stock price of your employer), then you could sell any shares immediately as they vest, and use the money to buy an index tracking ETF.
Stay competitive and willing to leave for a different company or find value in other things than gold.