Restricted Stock Units
Restricted Stock Units (RSUs) are a form of equity compensation granted by companies to employees, typically as part of a compensation package. They represent a promise to deliver company stock at a future date, usually subject to vesting conditions such as time-based milestones or performance goals. Upon vesting, RSUs convert into actual shares of stock, which employees can then sell or hold.
Developers should understand RSUs when evaluating job offers, especially in tech companies where equity compensation is common, as it can significantly impact total compensation and long-term financial planning. Knowledge of RSUs is crucial for negotiating employment terms, managing personal finances, and understanding tax implications related to vesting and stock sales. It's particularly relevant in startups and public companies where equity is used to attract and retain talent.