What can you do with restricted stock awards?

Once you are granted a restricted stock award, you must decide whether to accept or decline the grant. If you accept the grant, you may be required to pay your employer a purchase price for the grant. After accepting a grant and providing payment (if applicable), you must wait until the grant vests.

Are restricted stock awards included in shares outstanding?

RSUs represent an interest in company stock, but they have no tangible value until the shares vest and restrictions for the employee lapse. Another difference is that stock is not issued for an RSU until restrictions lapse, so RSUs do not count as outstanding shares. …

Are restricted stock awards dilutive?

RSUs/PSUs are one of the three dilutive instruments. Once exercised, RSUs increase a company’s equity value because of an increase in the number of shares outstanding. RSUs do not count as outstanding shares until the restrictions get lapsed.

What happens when you accept a restricted stock award?

Once an employee is granted a Restricted Stock Award, the employee must decide whether to accept or decline the grant. If the employee accepts the grant, he may be required to pay the employer a purchase price for the grant. After accepting a grant and providing payment (if applicable) the employee must wait until the grant vests.

What happens to restricted stock when it vests?

Vesting periods for Restricted Stock Awards may be time-based (a stated period from the grant date), or performance-based (often tied to achievement of corporate goals.) When a Restricted Stock Award vests, the employee receives the shares of company stock or the cash equivalent (depending on the company’s plan rules) without restriction.

What’s the difference between restricted stock and restricted stock units?

There are two main types: restricted stock awards (RSA) and restricted stock units (RSU). Both can be lucrative parts of a compensation package, but they have important differences that can affect your long-term financial interests. What is Restricted Stock?

Why do companies give restricted stock to employees?

Restricted stock is equitygranted to employees as part of their compensation packages. Often these grants are made by young companies that can’t yet afford to pay high salaries, with companies granting restricted stock in lieu of higher cash compensation. Unlike more common stock options]