Restricted stock units (RSU) play a key role in developing a competitive equity compensation offering. However, leveraging the traditional sell-to-cover process to pay for tax obligations at RSU vesting frequently causes employee confusion and financial frustration while reducing the value added for employees.

Employing an average sales price as the fair market value (FMV) can align tax outcomes with participant experience by reducing short-term gains or losses thereby decreasing employee confusion regarding tax treatment and easing administrative burdens for stock plan administrators. Implementing this approach creates an agile vesting environment, drives cost savings, and positions the company to strengthen their ability to attract top talent.

Explore how to incorporate an average sales price-based RSU vesting protocol to your equity compensation landscape that increases vesting efficiency, meets your employees’ expectations, and improves the value delivered through the RSU program.

Bring your RSU vesting process forward with support from our equity and technology professionals. Working with your teams, our professionals leverage their combined knowledge to help develop a vesting infrastructure that addresses current needs and supports future goals.

How the Process Works

Although each equity compensation plan is unique, our Sell-to-Cover FMV Alignment projects follow a comprehensive process that results in an improved RSU vesting environment.

• Discovery. Our process begins with a review of your current RSU vesting processes and procedures, to establish a baseline. We then identify the potential gains to your employees that a change in your RSU vesting process could facilitate. Finally, we work with you to discern if a change to your process will benefit your organization.
• Customization. Using the results from the discovery process, we identify how the system(s) should be tailored to meet your company’s needs and goals.  
• Implementation. Working with your internal and external stakeholders, our team helps initiate key improvements, adopt necessary customizations, and mitigate risk across all stages of the process.
• Ongoing Support. Our professionals are on hand to offer ongoing support to your teams as your new and improved RSU vesting process integrates with your infrastructure.

Deeply immersed in equity compensation, our professionals have extensive knowledge of the nuanced operations associated with equity compensation plans, structures, and operations. Our team seamlessly combines industry expertise with technology-driven solutions to resolve complex stock compensation and equity management challenges for companies of all sizes.

Our equity professionals and technology specialists work together to deliver innovative solutions that simplify operations, improve financial reporting, and elevate participant experiences. Our team assesses current practices against industry best practices, delivering compliance and strategic alignment with evolving standards.

Our one-firm approach allows your organization to tap into the full resources of our firm, integrating guidance and solutions related to other integral support areas including finance, tax, and audit concerns, as well as comprehensive public company and digital advisory services.