Week 33: Grow Income, Tactic 9

What can you do this week?

• If your employer is a publicly traded company, do your employees have RSU stock compensation benefits available?

• If so, research the what, who, and how in your employer benefits manual and in careful conversation with colleagues.

• In concert with development conversations with your leader, explore what value you can bring to the company and how RSU compensation maybe a part of your reward for the work.

What You Are Compensated With Matters Too

• A merit increase in salary is a great benefit. This allows you to defer more of your income to benefits like an HSA plan, 401k, or some deferred compensation plans.

• Sometimes being employed in company stock instead (or in addition a to) cash compensation can help you substantially grow your income and wealth overall.

• Below is a simple example of only one RSU grant in July 2014 in a real company’s stock that if held and not sold would have grown to this summer.

• This can obviously go the other direction as well when companies don’t perform.

  

  What is an RSU?

• Per Investopedia: “RSUs represent an unsecured promise by the employer to grant a set number of shares of stock to the employee upon the completion of the vesting schedule. Some types of plans allow for a cash payment to be made instead of the stock, but most plans mandate that actual shares of the stock are to be issued — though not until the underlying covenants are met.”

• RSUs are often a form of golden handcuffs. These are benefits provided by a company to retain valuable contributors.

• There are many forms of golden handcuffs and to be offered such incentives is a big compliment professionally.

• These incentives are not just given however.

• They are usually contingent upon the company meeting certain goals.

• These can 100% not be within your control.

  

• For many recipients, it’s a question of what to do with these shares when they arrive.

• More company ownership does represent more financial risk since your income and benefits are already dependent upon the company’s success.

• Selling some shares when vested but then holding shares received in some future vests may work to your benefit long term.

  

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Is This An Option For Me?

• RSU compensation can often be reserved for management and leadership roles within companies.

• What are your career aspirations? If you are currently in management, driving major company initiatives that materially benefit the company, or your talent is one that is highly sought after, this form of compensation maybe an option for you to inquire about.

• As part of a development conversation, you can inquire about these forms of compensation with your leader.

• Be sure to lead with what you can contribute, the specific benefits to the company, etc. when proposing a change or increase in compensation.

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