Restricted stock unit
Also called RSU, RSUs.
A promise to deliver shares (or cash equivalent) after vesting. RSU grant-date value is reported in SCT Stock Awards, not when the shares later vest.
What it is
A restricted stock unit (RSU) is a promise to deliver a share (or the cash equivalent) after the executive satisfies vesting conditions, usually continued employment over one to four years. Unlike restricted stock, an RSU is typically not an issued share at grant: no voting rights and usually no dividends until settlement, unless dividend equivalents are attached.
In the SCT, RSUs sit in Stock Awards at grant-date fair value, generally the share price on the grant date times units granted (with adjustments for dividends or post-vesting restrictions). Vesting and Form 4 acquisitions happen later and do not rewrite that SCT year.
Why companies use it
RSUs are the workhorse LTI award at S&P 500 companies. They retain people, they are easy to value, and they still have value if the stock falls (unlike at-the-money options).
Payroll and share-counting are simpler than options. Many companies shifted from options to RSUs after accounting-expense rules made options less “free.”
Pros
- Value moves with the stock on a one-for-one basis.
- Retains executives through the vest date.
- Simpler for employees than option exercise mechanics.
Cons
- Pays for staying, not necessarily for outperformance, unless paired with PSUs.
- Dilutes shareholders when shares are issued.
- Grant-date SCT value can be much higher or lower than value at vest.
Examples
Three-year ratable vest
30,000 RSUs granted in 2025 vest 10,000 per year in 2026–2028. The 2025 SCT shows the full grant-date value. Each vest year, Form 4s may show shares acquired and shares withheld for tax—not a new Stock Awards number for the old grant.
How CompensationBase stores it
If the proxy labels the grant “RSUs,” the dollars still live in the Stock Awards column. The catalog does not keep a separate RSU-vs-PSU dollar split.
On CompensationBase
When a proxy labels stock awards as RSUs, CompensationBase still stores the amount in the Stock Awards column at grant-date fair value.
Related terms
- Stock awards
The grant-date fair value of stock-based awards (typically RSUs, restricted stock, and PSUs) reported in the SCT Stock Awards column.
- Vesting
The schedule on which an executive earns the right to keep equity. SCT totals use grant-date value, so a large reported year does not mean the shares have vested.
- Performance share unit
An equity award that vests based on performance goals such as relative TSR or EPS. The SCT reports grant-date fair value, which can differ from shares that later actually vest.
- Grant-date fair value
The accounting value of equity awards on the day they are granted, which is what the Summary Compensation Table reports for stock and option awards—not the value later realized when shares vest or are sold.