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So, here's my status: I have never owned stock or investments of any kind, and currently have only a checking and savings account to my name, with a small amount of stock.

I'm receiving a signing bonus of restricted stock units of my employer's stock next month, disbursed to me 5% year 1, 15% year 2, and 20% every 6 months after (so, over 4 years).

I want to manage this somewhat intelligently, so what do I need to do to make that happen? The truth is, I don't know enough about this stuff to even ask the right questions, but I have at least one:

I intend to track my portfolio using Google finance, so how should I create this item in it? At a purchase price of $0, 5% now, and the rest as they become available to me, manually? Or is there a better way to log it?

I realize that my questioning is sort of undirected and probably doesn't make a lot of sense; please guide me!

Edit

In response to comments below:

  • I'm in Canada at the moment, but the job is in the USA and I'll be moving there for it.
  • The company is publicly traded
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    Is your employer's stock publically listed? Can you sell it on the open market or do you have to hold it?
    – Joel Spolsky
    Commented Apr 12, 2011 at 22:52
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    Also... let us know what country you're in; tax laws may vary.
    – Joel Spolsky
    Commented Apr 12, 2011 at 22:52

1 Answer 1

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Coincidentally just read a nice post on this topic: http://thefinancebuff.com/no-tax-advantage-in-rsu.html

In short, sell the stock as soon as it vests and treat it as a cash bonus. Assuming you're in the US and the stock is possible to sell (public company, no trading window restrictions, you have no material nonpublic information, etc.)

What do you do with a cash bonus? If you have no savings, an emergency fund would be good, then start on retirement savings perhaps... it sounds a bit like you could use some broad general financial planning info, my favorite book for that is: http://www.amazon.com/Smart-Simple-Financial-Strategies-People/dp/B0013L2ED6

One exception to selling immediately could be if the company stock is hugely undervalued, but it probably isn't, and it's probably too hard to determine.

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  • Yes; sell RSUs as soon as you can. If you're working at the company you already have enough exposure to their performance; you don't need any more assets in it. At least stock options sometimes qualify for better tax treatment if you hold them long enough, and you can manipulate when you realize the gain; RSUs generally don't let you do either.
    – user296
    Commented Apr 14, 2011 at 14:38
  • If you did not sell your RSUs immediately after they vest, and the value has increased, would you recommend waiting a year after vesting to sell to get the long-term capital gains tax rate?
    – Craig W
    Commented Jan 25, 2013 at 6:58
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    It really depends on the situation - if you know your marginal tax bracket you can estimate how much money you'd save on taxes - the gain times (your bracket minus the 20% on long-term gains). Then you might look at how much you lose if the stock drops 20% or 50% or whatever you want to assume. And decide whether it's worth the risk.
    – Havoc P
    Commented Jan 30, 2013 at 19:59

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