How do Googlers manage their RSUs?

Question (Orig. on Quora):

Since RSUs makeup for major chunk of their future savings, do Googlers feel insecure about stocks dropping significantly ? For example, LinkedIn stocks lost their worth significantly overnight. Do Googlers sell immediately or reinvest into other venues or just hold onto them ?

Answer (by Dan Walter):

I think if “Googlers” as a group did mainly the same thing, the would be deemed far less intelligent than expected.

Doing the “right thing” with RSUs depends on many factors. Some of these are personal, some are market driven, some are income and tax driven and still others are driven by psychology.

Here is what the smart people do.

1) Long before their RSUs vest they take advantage of the financial education and planning opportunities offered by the company or recommended agents.

2) As their RSUs vest that look at the current market conditions, the plan put together with their financial advisor and any indicators of how things may change.

3) They also look at their current cash position, their current concentration of Google stock, and related industry stock as part of their portfolio.

4) They look at what other vesting events may be occurring in the near term future.

5) They look at any potential cash payments they may be receiving soon.

6) After all of that they make a determination to keep or sell the share delivered after vesting. This decision will be different for different people and will be different for different vesting dates.

They key to equity compensation is being well educated about your awards and the choices surrounding them.

In my more than two decades of working on these programs I have found that perhaps a single digit percentage of ALL equity holders truly utilize these awards well. It should be noted that this single digit percentage is across all companies. This means that, at many companies, the percentage is below the fraction of 1% and at others it is quite high. This is mainly due to the amount of time, effort, passion and money the company spends on educating people. BUT, individuals can get much of this information on their own, even if their company is relatively silent.

How do you sell Facebook stocks (RSUs) that you have?

Question: (org. on Quora)

How do you sell Facebook stocks (RSUs) that you have?

Answer (by Dan Walter)

This answer will be generally accurate for any RSUs that can be settled in company stock. Your company may have additional rules or restrictions.

1. The RSUs must vest. When they vest they essentially turn into stock.

2. Pay the taxes due at the time of vest. For most companies this is done automatically using some of the shares that trail from vesting.
Withhold to Cover, or Net Settlement is a process where the company simply holds back vested units with a value roughly equivalent to the taxes owed. (This was the historical process used by Facebook)
Sell to cover is a process where the company will take some of the vested RSUs that have turned into stock and have a designated broker immediately sell those shares on the open market. (This is the current process used by Facebook for most RSUs)
In both cases the remaining shares are then delivered to you. Typically they are sent directly to a designated brokerage account.

A small percentage of companies also allow you to write a check for the taxes. They then deliver all of the vested shares. This process is a pain and often ends up in the individual failing to make a timely payment so it’s pretty uncommon.

3. The shares that are delivered to you can then be sold by you. A) but you can’t be in a trading blackout period     B) you can’t have any inside information that would otherwise prohibit you from trading in the companies stock.   C) all other securities laws etc will apply to you.

Lastly, if you RSUs have not vested, or will never vest (as in the case where you no longer work for the company), then you are out of luck.