Should I sell my RSUs or hold them?

If you wouldn’t buy your company’s stock with your own cash, you probably shouldn’t keep RSUs after they vest.

RSUs are a form of compensation, not an investment strategy. Selling them is not “disloyal” — it’s financial planning.

Why RSUs Vesting = Taxable Income

When your RSUs vest, the value of the shares is taxed as ordinary income. If 5,000 RSUs vest at $50 per share, that’s $250,000 in added income — and it triggers a tax bill, even if you don’t sell the stock.

At that point, your RSUs are regular stock. Any further gain or loss depends on the market — not your job performance.

Why Holding RSUs Can Be Risky

Most executives already rely heavily on their company:

• Your salary
• Your health and retirement benefits
• Your career trajectory

If you also hold a large portion of your net worth in company stock, you’re overexposed. A downturn at the company hits your income, benefits, and investments — all at once.

When to Consider Selling RSUs

Selling is usually better if:

• You wouldn’t buy the stock outright
• You want to reduce risk and diversify
• You need cash for goals or tax payments
• You’re unsure about your company’s future

Holding might make sense if:

• You believe the company is undervalued
• You can tolerate volatility
• You’re holding for a specific short-term price target

The Litmus Test I Use with Clients

If you were paid the same amount in cash instead of stock, would you use that cash to buy your company’s shares?

If the answer is no, it’s probably time to sell.

Bottom Line

RSUs are income. Treat them like income.
Sell what you don’t want to bet on long-term, and build a strategy for the rest.

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