Why RSUs Are Simple to Get, but Complex to Manage

Restricted Stock Units (RSUs) are one of the most common—and misunderstood—forms of equity compensation. On the surface, they seem straightforward: your company grants you shares, they vest over time, and once they vest, they’re yours. But as many tech professionals discover, RSUs can become surprisingly complex when taxes, timing, and market volatility enter the picture. 

Why RSUs Catch People Off Guard

When your RSUs vest, they’re taxed as ordinary income, based on the fair market value of the stock on the vesting date. This often comes as a shock at tax time, especially if your RSU income pushes you into a higher marginal tax bracket or triggers additional taxes like AMT or the Net Investment Income Tax. 

And taxes aren’t the only risk. 

If you continue to hold your shares after vesting, you’re taking on market risk. If the stock price declines after vesting, you may find yourself in a frustrating position: owing taxes based on a higher value than what your shares are currently worth. 

The Hidden Cost of 'Doing Nothing'

For many executives and senior technologists, the biggest RSU mistake isn’t a bad decision—it’s no decision at all. Without a proactive strategy, RSUs can unintentionally concentrate risk in a single stock, disrupt cash flow for tax payments, and create uncertainty around long-term financial goals. 

Where RSUs Fit Into Your Equity Compensation Strategy

RSUs shouldn’t be managed in isolation. They are a core part of your equity compensation plan, alongside bonuses, options, and other long-term incentives. A thoughtful RSU strategy considers: 

• Tax-efficient timing of sales 
• Diversification away from concentrated employer stock 
• Alignment with your broader investment allocation
• Liquidity planning for major life goals 

This is where comprehensive equity compensation planning makes the difference between reacting at tax time and planning with confidence. 

Planning Ahead Matters, Especially for 2026 and Beyond

With RSUs, waiting until April is often too late. Proactive tax and equity planning—well before vesting dates—may help you reduce surprises and give you more control over outcomes. 

If you don’t yet have a plan in place for your upcoming RSU vesting, our guide, Maximizing Your Restricted Stock Units in 2026, walks through the key decisions and trade-offs every equity-compensated professional should understand. 

RSUs may be simple to get—but managing them well requires intention, strategy, and coordination and that’s exactly why we have created this resource. 

P.S. Do you want the guide? Download today!

Disclaimer: Schmidt Financial Management, Inc., (SFM) is a registered investment adviser. This information is only intended for clients and interested investors residing in jurisdictions in which SFM is qualified to provide investment advisory services. Blog posts do not intend to provide personalized investment advice through the various broadcasts and does not represent that the securities, services, or strategies discussed are suitable for any investor. Investors should consult with their financial advisors before making any investment decisions. The S&P 500 Index is a market-value weighted index representing the 500 largest U.S. public companies. The Bloomberg US Aggregate Bond Index measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. This video is for informational purposes only and does not constitute a recommendation to buy or sell cryptocurrency. This content specifically addresses restricted stock units (RSUs), which can be complex financial instruments. The information presented here may not be applicable to your individual situation. We strongly recommend consulting with a qualified financial advisor, tax professional, or legal counsel before making any decisions regarding RSUs or other financial matters. Equity 411, presented by Schmidt Financial Management, Inc. (SFM) does not guarantee the accuracy, completeness, or timeliness of the information provided. We are not liable for any losses or damages arising from the use of this information. Investing in securities, including RSUs, involves risks and may not be suitable for all individuals.