Glossary
Definition
Restricted Stock Units (RSUs)
Company shares granted to employees that vest over time.
Restricted Stock Units (RSUs) are grants of company shares that vest over a defined schedule. Unlike stock options, RSUs always have value as long as the stock price is above zero — the recipient receives the full share value when they vest. RSUs have largely replaced stock options at major technology companies as the primary form of equity compensation.
Frequently Asked Questions
Are RSUs better than stock options?
RSUs are less risky — they have value even if the stock price falls from the grant date. Options can expire worthless if the stock price stays below the strike price. RSUs are generally preferred by executives at established companies; options are more common at startups.