Complicated Restricted Stock Units question

Discussion in 'Finance, Investments, and Careers' started by Russ Smith, Nov 25, 2019.

  1. Russ Smith

    Russ Smith The Original Whizzinator Contributor

    Age:
    54
    Posts:
    57,406
    Likes Received:
    5,262
    Joined:
    May 14, 2002
    When I started I was granted a given number of stock in RSU's. We got bought out so now the value of the RSU's is fixed at the amount of the buyout. I just passed my first year anniversary so I got paid out the first 25% of the RSU's. Rather than do it as a normal stock sale, they included it as a separate paycheck including social security, medicare etc, stuff you wouldn't normally withold from a stock sale(just capital gains).

    For that reason they took just over 40%. My assumption is that this will show up on a W2 end of year as just income, the check actually says bonus not stock sale, so I'm guessing I will get back some of that 40% in income tax refund?

    Just curious if that sounds right, everyone is in the same boat so depending on start date people get theirs and suddenly think man that's a lot of tax.I have to assume it will even out in the tax refund otherwise they're going to have some very angry employees because you're losing at least another 10% in taxes maybe more if the 40% held up.
     
  2. Ouchie-Z-Clown

    Ouchie-Z-Clown I'm better than Mulli!

    Age:
    50
    Posts:
    24,562
    Likes Received:
    9,480
    Joined:
    Sep 16, 2002
    Location:
    SoCal
    I wonder if it was phantom stock?
     
  3. Russ Smith

    Russ Smith The Original Whizzinator Contributor

    Age:
    54
    Posts:
    57,406
    Likes Received:
    5,262
    Joined:
    May 14, 2002

    Yeah I don't know I've never had RSU's before but it seems strange to me they were able to convert it like that. For example. the deal was 12 months to get 25% vesting, then after that, you vest 1/twelfth of your annual total every month. So I should be able to sell every month and get that money. Instead, I have to wait until May for the next 6 months, it vests monthly but I can only cash in every 6 and it's not a sale it's automatic. in fact Trinet literally calls it a bonus not a stock sale.

    I don't think I'm actually losing any money this way but it does seem worse because of the higher upfront tax
     

Share This Page