Vesting is the process of earning an asset, like stock options or employer-matched contributions to your 401(k) over time. Companies often use vesting to encourage you to stay longer at the company and/or perform well so you can earn the award.11 Jul 2019
What happens after share vest?
Employee Stock Options (ESOs) : For ESOs, when stock becomes fully vested, the employee has earned the right to an option to purchase the shares that were granted to them in the past. Restricted Stock Units (RSUs) : For RSUs, when stock becomes fully vested, the employee has earned the ownership of the shares outright.2 Feb 2021
Can stock options vest immediately?
Some companies grant stock options that are immediately exercisable, but you receive shares that still need to vest before you own them outright. Until then, the stock is still subject to a repurchase right if your employment ends before vesting.
Can you sell vested shares?
Once an employee's stock has vested they can choose to hold on to the shares or they can sell as they would any other stock and use the money for other purposes.16 Dec 2019
How do I cash out my vested stock?
Contact your company's plan administrator and indicate you'd like to cash out your stock. For a privately held company, the company must buy back your stock for a price set by an outside auditor. Complete the required paperwork and wait for your check.
Should you sell stock when vests?
This all being said, it's worth repeating: the best and most prudent approach is to sell all of your RSUs as soon as they vest. It's still a wise choice to sell all of them even if the stock price ends up rising, because you are protecting your wealth from undue risk.25 Jul 2021