Restricted Stock Units (RSUs) are like a “golden handcuff” bonus from your employer—instead of cash, they give you shares of company stock that slowly become yours over time (usually 3-4 years). You can’t sell or cash them in until they “vest” (unlock), which keeps you sticking around to earn the full reward. Once vested, you own the shares, but taxes hit hard the moment they’re yours (the IRS treats it like income). The catch? If the stock tanks, your “bonus” shrinks. If it soars? You’re basically printing money. It’s how companies tie your success to theirs—and keep you from job-hopping too fast.
Example: An employee has been granted 1,000 RSUs with a 4-year vesting schedule at 25% per year. In each of the four years, 250 shares vest. By the end of four years, the employee has gained full title to all 1,000 shares.