By Maria Kelly, CFP® & Phil Matalucci, CFP® | March 2026
As equity award season gets underway, Amplius team members Maria Kelly, CFP® and Phil Matalucci, CFP® break down two of the most common types of equity compensation: Restricted Stock Awards (RSAs) and Restricted Stock Units (RSUs). They highlight the difference between the types, and the importance of a sound strategy centered around a few key questions.
Key Takeaways from Part 1 of Our Equity Compensation Series
1. RSAs vs. RSUs: The Core Difference
With a Restricted Stock Award, you become the owner of your shares on the day they’re granted. The shares are held in escrow and released on a vesting schedule — monthly, quarterly, or annually — but legally, they’re yours from day one. You may also receive dividends and voting rights during that period.
A Restricted Stock Unit works differently. It’s not ownership — it’s a promise. Your company commits to delivering a certain number of shares over time, but the final amount can vary based on how the stock performs between the grant date and the vesting date.
2. How Both Are Taxed
Both RSAs and RSUs are taxed the same way at vesting: the value of your shares is reported on your W-2 and subject to federal, state, local, FICA, and Medicare taxes. The typical default withholding rate is 22% — but if you’re in a higher tax bracket, that may not be enough to cover your liability. And if you hold shares after vesting, short- or long-term capital gains taxes may apply depending on how long you hold them.
3. The 83(b) Election — RSAs Only
RSAs come with an option that RSUs don’t: the 83(b) election. This allows you to pay taxes on your shares at the time of the grant rather than at vesting. If you believe your company’s stock is undervalued now and likely to grow, paying the tax bill today could mean significant savings down the road. This strategy is especially common with startup equity, where upside potential is high.
4. A Three-Part Framework for Managing Your Company Stock
Regardless of which type of equity you receive, the bigger question is: what do you do with it? At Amplius, we start with three questions:
What is your current exposure? How do your vested and unvested shares compare to your total liquid net worth?
What’s the right exposure for you? The general rule of thumb is 5–15%, but your risk tolerance and financial picture are unique.
How do you get there tax-efficiently? Options include donor-advised fund contributions, structured sell plans, and other tax planning strategies tailored to your situation.
Why It Matters
Equity compensation can be one of the most valuable parts of your total compensation — but only if you have a plan. The tax implications alone make it worth understanding well before vesting season hits.
“There’s not a one-size-fits-all approach. Everyone has different circumstances. What’s most important is being able to answer those three questions before you make any decisions.” — Phil Matalucci
This is Part 1 of a three-part series. Parts 2 and 3 will cover stock options and ESPPs.
Frequently Asked Questions: RSAs, RSUs, and Equity Compensation
Q: What is the main difference between an RSA and an RSU?
A: With a Restricted Stock Award, you become the legal owner of shares at the time of the grant, even though they’re held in escrow until they vest. With a Restricted Stock Unit, you receive a promise of future shares — you don’t own anything until vesting occurs. Amplius Wealth Advisors helps clients understand which type they hold and how to plan around it.
Q: How are RSAs and RSUs taxed?
A: Both are taxed as ordinary income at the time of vesting. The value of your shares is reported on your W-2 and subject to federal, state, local, FICA, and Medicare taxes. The typical default withholding rate is 22%, which may not be sufficient for higher earners. Amplius can help you assess your withholding and plan ahead.
Q: What is an 83(b) election and should I consider it?
A: The 83(b) election allows RSA recipients to pay taxes at grant rather than at vesting. If the stock is expected to appreciate significantly, this can result in a lower overall tax bill. It only applies to RSAs — not RSUs. Amplius Wealth Advisors evaluates whether this election makes sense based on your specific situation.
Q: How much company stock is too much?
A: The general rule of thumb is to keep company stock exposure between 5–15% of your total liquid net worth, though the right number varies by person. Amplius works with clients to assess their current concentration and develop a tax-efficient strategy to reach their target allocation.