Short answer: decide what you will sell before the shares vest, while you can still think clearly.
Vesting day is a bad day to invent a strategy. The broker portal is open. The stock may be up or down. Taxes may be confusing. You may feel loyal to the company or afraid of missing future upside.
That is how employees end up holding by default.
Start with the purpose of the rule
A selling rule is not a prediction tool.
It does not tell you where the stock will go. It tells you how much company-stock risk you are willing to keep.
That is a different question.
If your employer stock is already a large part of net worth, the rule should reduce concentration. If you need cash for a known goal, the rule should fund that goal. If you want to keep some employer exposure, the rule should define how much is enough.
Choose a simple rule
Start simple.
You can choose:
- ✓Sell a fixed percentage at every vest.
- ✓Sell enough to cover tax and planned cash needs.
- ✓Sell anything above a chosen concentration threshold.
- ✓Sell gradually during open trading windows.
- ✓Hold only the amount you would buy today with cash.
The rule does not need to be perfect. It needs to be written.
Add tax and trading checks
Before using any rule, check:
- ✓Tax impact at vesting.
- ✓Tax impact at sale.
- ✓Employer trading windows.
- ✓Blackout periods.
- ✓Insider trading policy.
- ✓Foreign asset reporting.
- ✓Currency conversion records.
These checks can affect timing. They should not be afterthoughts.
Avoid emotional exceptions
Most selling rules fail because the employee makes exceptions.
"The stock is down, so I will wait."
"The stock is up, so I will wait."
"Earnings are next month, so I will wait."
Sometimes waiting is reasonable. But if every market move becomes a reason to delay, there is no rule.
Write the exceptions in advance. If you cannot define the exception, it is probably emotion.
Review after each vest
After every vest, update:
- ✓Employer stock as a percentage of net worth.
- ✓Unvested shares remaining.
- ✓Cash needs for the next 12 months.
- ✓Tax records.
- ✓Whether the rule still fits.
This turns RSU management into a repeatable process.