[00:01] like SpaceX, Amazon, Apple, or any other big company that offers stock, you might get offered something called an RSU or a restricted stock unit. These incentivize longer, and most of these RSUs have what's called a 4-year vesting schedule
[00:17] mean? Pretend you're granted 4,000 shares of SpaceX when you sign your offer letter. Well, from day zero to the end of year one while working there, you cliff. That's to ensure that people don't just join the company, grab and
[00:31] then quit, which makes a lot of sense. At year one, you will unlock 25% of your shares, and then you'll start to vest more in equal amounts every month after that until you're fully vested at year four. Once RSUs become vested, they get
[00:43] now that they're actually yours, so you sell them. But, the thing most people miss is that once they vest, they actually count as income, so the value of those shares on your vesting day, it
[00:56] gets taxed like a paycheck. So, if you have 1,000 shares and the stock is trading at $150, that's $150,000 added if you never touch them or sell them at all. Some companies will handle this by
[01:09] automatically selling some of your shares to cover the tax. That's pretty normal. And this is how stock-based compensation works, especially at a big compensation works, especially at a big company.