Author Topic: Time-based Restricted stock award  (Read 1870 times)

Murr

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Time-based Restricted stock award
« on: June 12, 2014, 09:27:07 AM »
I've been fortunate enough to receive some time-based restricted stock in my company as part of my annual bonus. These are not options and are essentially free shares in the company that a portion of which vests every year in August for the next 3 years. My question; do I sell my shares as they vest every august and then re-invest the proceeds into my overall strategy or do I let them sit until I need them or they all vest? I'll need to pay taxes on the proceeds either way when they are sold.
Part of me looks at them as house money so leaving them be sounds good. The other part of me says to sell them as soon as they vest and get them into my larger strategy as that is the smart thing to do. The total amount is not crazy, todays value is about $15K total.

gimp

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Re: Time-based Restricted stock award
« Reply #1 on: June 12, 2014, 12:29:27 PM »
Sell. The only time you'd do better to wait is if the stock tracked or beat the market. (Tracking as opposed to beating works because if you wait, you sell as long-term capital gains, as opposed to short-term, which saves taxes.)

If you have a lot of faith in your company and think it will do better than the market, then sure, feel free to keep. That's a matter of loyalty. As far as prudence goes, selling is the better choice in my opinion.

rmendpara

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Re: Time-based Restricted stock award
« Reply #2 on: June 12, 2014, 12:53:17 PM »
Diversification suggests you shouldn't own a ton of stock in the company you work for (double whammy if you get laid off and the stock goes South).

However, as an insider, you obviously have more sources of information than just the financial data to judge if the company is on a positive trajectory than an outside investor, so you could tell if it was oversold, or probably had further room to run.

I'd sell when advantageous, as it really is just house money. I may reconsider if it is in a loss position, but be happy if they are flat or in a gain position.

Murr

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Re: Time-based Restricted stock award
« Reply #3 on: June 12, 2014, 02:01:22 PM »
Thank guys. You just helped me make up my mind.......sell sell sell