Restricted Stock Units deliver shares automatically at vesting - they are not an option to buy shares at an exercise price.

When an RSU vests, the company transfers shares to the employee at fair market value. An employee receiving 1,000 RSUs when the stock is at $50 recognizes $50,000 as ordinary income on that date - taxed at their marginal rate regardless of whether they sell. Companies typically retain a portion of the vested shares and sell them to cover withhold share - a process called net settlement.

This differs structurally from stock options. An option holder controls when to exercise and therefore when the taxable event occurs. An RSU holder has no such choice: settlement/transfer is generally the tax event, often occurring at or shortly after vesting.

For pre-IPO companies, a common solution is a double-trigger RSU structure: the employee satisfies a service-based vesting condition, but the RSUs aren't settled until a second trigger—typically an IPO or other liquidity event—occurs. This can align the tax event with an opportunity to sell.

Marvell Technology issued Google a warrant to purchase up to 58.97 million shares at $206.58 each - a stake worth as much as $12.2 billion if fully exercised - as part of an expanded custom-chip agreement.

The warrant does not vest on a fixed schedule alone. About 1.36 million shares vest in quarterly installments over the first year; the remaining shares unlock in 240 equal tranches, one for every $500 million in chip revenue Marvell records from Google purchases through fiscal 2033. Google's equity stake grows only as its purchasing commitments are fulfilled.

For founders and admins tracking equity structures, this illustrates a warrant used not as a fundraising instrument but as a commercial incentive: equity that vests with revenue, not with time.

Source: Bloomberg via Quartz

Managing employees on EquityList involves much more than simply adding a name to your cap table. From the day someone joins your team to the day they depart - and every stage along the way - there are many details to handle correctly, and the stakes are high.

In this Office Hours session, we'll cover the entire employee lifecycle from start to finish. We'll show you how to add employees one at a time or in bulk, how to set up dashboard access and configure exercise periods based on the reason for termination, and how to carry out a termination smoothly when the time comes - before opening the floor to your questions live.

Whether you're onboarding your very first hire or overseeing a team of hundreds, this session will give you the confidence to manage every phase of the employee journey without missing a beat.

August 26 | Wednesday | 3:00 PM IST