For people that receive RSUs and can invest in ESPP through your employer, what do you typically do when the stock vests?

I generally hold my RSUs when they vest until I need them for a sizable purchase (or feel like i've accrued too many shares).

With ESPP, I used to sell right away since it was salary dollars, but i've been letting it ride (to get long term gains), which was not wise over the last 8-12 months. Sitting at a sizable loss now.

Wondering what other's strategies are.

sirhc said:

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For people that receive RSUs and can invest in ESPP through your employer, what do you typically do when the stock vests?

I generally hold my RSUs when they vest until I need them for a sizable purchase (or feel like i've accrued too many shares).

With ESPP, I used to sell right away since it was salary dollars, but i've been letting it ride (to get long term gains), which was not wise over the last 8-12 months. Sitting at a sizable loss now.

Wondering what other's strategies are.

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I sold RSUs right when they vested and put them into something else via my brokerage account.

On ESPP, I too let them ride hoping for gains... I bought in between $21 and $12, and by the time I sold they were worth $1.19 so...... Don't do what I did. That was over 90% in losses over the span of about 3 years.

You have enough tied up in your job that you should diversify where you can.

I sell my RSUs as soon as they vest. I already have my income and benefits tied to the overall performance of the company in the form of employment vs layoffs, so I don't want to have any more of my financial picture reliant on the company doing well. There are plenty of other investments I could make to help diversify my portfolio.

similar question I have... when the RSU's vest... do you sell to cover the taxes... or do you choose to deal with the taxes later? I have been selling to cover up to this point, but find that the taxes are a pain in the ass downstream to show the sale, so now i wonder if its worth it? Is there any advantage to not selling to cover on taxes?

Foamcows said:

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similar question I have... when the RSU's vest... do you sell to cover the taxes... or do you choose to deal with the taxes later? I have been selling to cover up to this point, but find that the taxes are a pain in the ass downstream to show the sale, so now i wonder if its worth it? Is there any advantage to not selling to cover on taxes?

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Mine sells to cover automatically. I haven't looked into if i can change that or not, but I appreciate it doing it so less i have to worry about in the future.

sirhc said:

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Foamcows said:

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similar question I have... when the RSU's vest... do you sell to cover the taxes... or do you choose to deal with the taxes later? I have been selling to cover up to this point, but find that the taxes are a pain in the ass downstream to show the sale, so now i wonder if its worth it? Is there any advantage to not selling to cover on taxes?

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Mine sells to cover automatically. I haven't looked into if i can change that or not, but I appreciate it doing it so less i have to worry about in the future.

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Same here. And if I want to buy any back I have to contact compliance for approval (privy to confidential info, but nothing special). Not worth the hassle to me so it goes into other accounts.

My wife has ESPP and we sell hers quarterly to spread out the (small) fee. We keep a small percentage in there.

You should absolutely be selling an ESPP. Its basically a guaranteed option of at least the discount (15% usually). During good market times, mine have been 40% gains on 6 month investing timelines.

If you think in terms of cashflows, the ESPP is stupidly good returns. The last paycheck of vesting period gains 15% in two weeks. The first paycheck gains 15% in just 6 months (assuming halfs). ESPPs are incredibly powerful investing tools you can't replicate in the market.

And if you keep the money after it vests? All of that incentive evaporates. And if you always keep it, over your career you'll become way over levered to your company. At best you retire early because its just been going to moon. But if your company is doing that well for that long, you'll find a way to retire happily anyway. At worst you're doubly out a lot of your retirement money.

I get SAR's and RSU and have a 10b5-1 plan set up so even if I am blacked out I can execute my shares. I do not like to have more than 35-30% tied up with my current employer. Sure I can help drive the value but I want to be diversified. Every year I add value I am rewarded with a nice cash bonus so it all works out in the end.

My plan is to keep my ESPP shares until they qualify for long term cap gains, then as a new batch shows up sell the batch that is a year old. Easy to say that now as our stock is down quite a bit off ATH, so may change that once stock recovers.

What is everyone's limit on ESPP? Ours is 15% of base salary (up to $25K max). Wish I could put more in it!

Gordon McKernan said:

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What is everyone's limit on ESPP? Ours is 15% of base salary (up to $25K max). Wish I could put more in it!

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Yes, same. I believe this is a IRS limitation.


Is this common as well?

Quote:

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Your 15% discount is applied to the closing stock price on the first day or the last day of the 6-month purchase period, whichever price is lower."

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I have a question. So I was awarded RSU's last year when my company stock was around $1.80/share. Now its around $.34/share. I know the standard advice is to sell as soon as your RSU's vest, but what if the stock went way down in value. Would you sell or just let it ride and hope it rebounds next year.

What would you guys do when that first 1/3 vests in my situation?

you might want to hold it if you think the company is going to rebound as you are limited to the loss you can take from your selling at a loss to $3,000 (I think)

You may be down what it was granted to you at, but what it vests at is what you are taxed against. Like others, I'd try to limit exposure to your company. At .34, if it drops to .17, that's a 50% loss still. Manage how much risk and exposure you want to have.

Sell both as soon as they vest or I'm able.