What Is an RSU?

Full Definition

RSUs (Restricted Stock Units) are units of company stock granted to employees as compensation, with a vesting schedule that releases ownership over time. At major tech companies, the standard RSU vesting schedule is 4 years with a 1-year cliff (no vesting in the first year, then quarterly vesting after year 1) for new grants. Stock vests at the market price on the vesting date; the dollar value at grant time is computed using the stock price on the grant date. For senior+ FAANG candidates, RSUs typically make up 50-70% of total compensation. A typical L5 Google offer might be $200K base + $400K RSUs over 4 years ($100K/yr) + $100K sign-on, for ~$370K/yr total comp average. RSU value is subject to stock price movement: a $400K RSU grant at a peak stock price could be worth $250K at vesting time if the stock drops, or $600K if it rises. Refresh grants are typical at 2-3 year tenure to prevent the 'cliff drop' when initial grants finish vesting. Candidates should always negotiate RSU components separately from base — these are the largest dollar amounts and most negotiable component.