Restricted Stock

Restricted stock is a grant to an employee of company stock that is subject to limitations on the employee’s ownership rights, such as the right to sell the stock, until the restricted stock vests. Specific terms, such as the vesting period and whether the employee will be paid dividends before vesting are spelled out in an agreement between the employee and employer. Once the employee's shares of restricted stock vest, the employee owns the stock without limitations and can sell it at any time. Generally, if an employee leaves the company before the restricted stock vests, the employee forfeits the unvested restricted stock.

 

This guide is not intended to provide investment advice, and you should not rely on statements in this guide when making investment decisions.

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