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Equity Award Center

Restricted Stock Awards

Restricted stock awards are shares of stock given to you at no cost. Once they are granted, you have voting and dividend rights on the shares, but the shares cannot be sold or transferred until vesting requirements are met.

Vesting

Like employee stock options, most restricted stock awards vest over a fixed, time-based schedule. Your company may also set performance targets that can trigger or accelerate vesting of your shares.

If you leave your company or are terminated before vesting occurs, you forfeit any unvested restricted stock shares.

Taxation

There is no payment required for restricted stock shares upon initial grant. These shares become yours at no cost. However, there are tax implications upon the vesting of these shares.

You’re responsible for ordinary income tax upon vesting based on the value of the shares on the vesting date. Any dividends received from the shares are taxed as ordinary income. There are various ways your tax obligation may be satisfied. Please work with Schwab to help better understand each method.


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Understand your Restricted Stock Units?

Explore vesting, options & more.

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