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What is RSU (Restricted Stock Unit)? Is it better or worse to have the stock price to increase or to decrease for RSU?
Restricted stock units, or RSU, are a way an employer can grant company shares to employees. In addition to base salary, a company can decide to offer employees with RSUs, which are technically company stocks with limited terms. And RSU is what constitutes your total compensation package. For example, your base salary might be $200K, but your total compensation package per year might be $300K because your company decides to add another $100K per year in RSU.
Because RSU is consisted of stocks, you have to think carefully about whether that is a better or worse for companies that offer all cash options. About few years back, getting more RSU would be probably a better deal because there was a good chance that the stocks would go higher, meaning what you get “vested” for, say $100K, has a chance to become $150K or whatever.
But during an economy time when the interest rate is high while the stock market does not do well, you have to double think about how to play your offer. Although there is no perfect answer, here are some guidances depending on different situations that may matter.
