The RSU and Stock Option Checklist

Equity pay is easy to set aside until the tax bill arrives. Check off what you've done. What's left is your to-do list.

1. I know my next vesting or exercise dates and roughly what each will be worth. Pull your latest grant statements. Write down each date, the number of shares, and a rough value. The value moves with the stock price.
2. I know how each type of equity I hold is taxed. RSUs, ESPP shares, ISOs, and NSOs follow different rules. If you're unsure which you have, ask your equity plan administrator, and confirm the tax treatment with your CPA.
3. I've estimated the tax from this event and set cash aside. Withholding at vest is often a flat rate that can be lower than your actual bracket. Ask your CPA whether an estimated payment makes sense.
4. I know what share of my net worth is in my employer's stock. Add vested shares, ESPP shares, and the value of options you could exercise. Write the percentage down, then decide what level you're comfortable with.
5. I know what happens to my unvested shares and options if I leave or lose my job. Check your grant agreement for forfeiture, any exercise window after you leave, and severance terms.
6. I have an emergency fund that doesn't depend on my company's stock. Cash covering several months of expenses lets you make equity decisions on your timeline instead of under pressure.
7. My CPA and I have talked about this event before it happens. Share your dates and amounts early. Ask about estimated payments and, if you hold ISOs, AMT. A short conversation before the event beats a surprise after it.