What is unvested stock?

What is unvested stock?

Unvested Shares means Shares that have not yet vested or are subject to a right of repurchase in favor of the Company (or any successor thereto).

What happens when your equity vests?

What is vesting? When a company gives you equity as part of your compensation package, they’re offering you partial ownership of the company. However, your stock usually has to vest first, meaning you typically need to work for the company for a period of time if you want to become an owner.

What is vested vs unvested stock?

Vested stock is stock you have fully earned and own outright. You can sell or otherwise dispose of them at will. Unvested stock is stock promised to you but that you’ve not yet fully earned under the terms of your vesting schedule. So if you were to leave, you would have to forfeit the stock.

Can you sell unvested RSU?

Those unvested shares may represent a significant portion of your net worth. By selling your RSU shares as they vest, you protect yourself from unexpected deterioration in company performance, which could impact your employment and earnings, and the value of your remaining unvested company stock and options.

Can I sell unvested stock?

If a company has set aside a certain amount of stock for you, but stipulates that certain conditions have to be met before these stocks are assigned to you, such shares are considered unvested. Until the shares vest, you cannot sell or transfer them to another party.

Do I lose my stock options if I quit?

When you leave, your stock options will often expire within 90 days of leaving the company. If you don’t exercise your options, you could lose them.

Should I sell RSU when they vest?

Usually, it is recommended to sell the RSU immediately after the vesting period is complete to avoid any additional taxes. Insiders and employees that hold the RSU, need a RSU selling strategy. But for investors with a different and more diverse portfolio, holding on to the RSU is the choice to make.