[axxl]

Nearly everything in this article is too simple to be correct, or depends on details of your specific plan that is not generalizable. Two examples: ESPP is considered long term capital gains after the later date of 1 year after purchase OR 2 years from the date of the price you paid. Also typically the look back is the lower of the starting and ending price for a period, not lowest in the period.

The only way to provide simple advice on RSUs and ESPP is, as others have said:

Sell them immediately and diversify.

For everything else do research and don't trust a random article, coworker, or HN comment (mine included)

[PopAlongKid]

RSUs and ESPP are actually two very different things. By default, anything of value your employer gives you is considered compensation, taxed at ordinary rates. RSUs fall into this category.

But there is something called "statutory stock options", of which there are two types: ISOs and ESPP. The main benefit (under statute) is that if you hold on long enough, instead of ordinary compensation income, the gains can be treated as long term capital gains (LTCG) and taxed at a significantly lower rate.

[axxl]

To be fair I never claimed they were the same, just that my "simple" advice applies equally to both. I only called out 2 examples of the many ways this article is lacking in nuance on the details.

[4ad]

> Sell them immediately and diversify.

I can diversity even quicker with the extra cash I'd get instead RSUs and ESPPs.

[gorjusborg]

Unlike ESPPs (which you essentially buy with part of your paycheck) RSUs are pay with strings, so you usually don't have a choice between money and RSU.

You can think of RSUs as 'golden handcuffs' compensation. The point is to reward you, while discouraging you from ever leaving because there will always be some that are not vested.

[axxl]

Both are ways for the company to have your income be invested in the overall success of the company, which makes sense from an alignment perspective. ESPP usually has a material discount benefit, which typically is a "can't lose" scenario if you sell immediately (with some caveats of course as immediately isn't technically possible).

[MapleWalnut]

That’s true, but with ESPPs, you get a discount on the stock price, effectively guaranteeing a decent return that would be hard to beat.