RSU (Restricted Stock Units)

Intermediate 👥 Human Resources

Definition

Equity compensation that vests over time, converting hypothetical wealth into actual shares on a schedule designed to retain talent who can't afford to leave.

Example Usage

My RSUs vest quarterly over 4 years, so theoretically I'll own $200k of stock by 2028, assuming the company doesn't implode.

Origin

Legal equity structure developed in tech in the 1990s-2000s

Fun Fact

RSU value is as volatile as the stock price, making equity compensation the corporate equivalent of lottery tickets.

Source: Equity compensation structures

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