By David Hughes | Financial Advisor, Resurgent Financial Advisors
Autumn has a way of bringing big questions to the surface. As the year winds down, many professionals take stock of where they are – in their careers, finances, and future plans. For those with equity compensation, especially unvested stock, that reflection often comes with a fork in the road: Should I stay through my next vesting date, or is it time to move on?
It is a common dilemma, particularly in tech, biotech, or any industry where equity is a significant part of the compensation package. Staying may mean receiving thousands or even hundreds of thousands in stock value. Leaving may mean walking away from it entirely. These decisions are rarely simple, and the financial implications can be substantial.
This article is not here to tell anyone what to do. It is here to help professionals ask better questions – and understand the trade-offs before making a decision that might feel irreversible.
Understanding the Golden Handcuffs
Unvested equity is often called a “golden handcuff” for a reason. It is meant to keep talent from walking out the door. That next big vesting milestone might be six months away. Or three months. Or even three weeks. In many cases, companies structure these awards with the intention of buying loyalty.
There is nothing wrong with that. It is a strategic tool. Still, for the employee, it can feel like a trap wrapped in a gift box. The financial reward is real, but it comes at the cost of deferring career change, personal fulfillment, or professional growth.
Weighing the Financial Value
It can be tempting to reduce the decision to a single number: How much am I leaving behind? That is a valid place to start. Calculate the dollar value of your unvested equity using a conservative estimate of the current stock price. If the company is public, that part is easy. If it is private, consider recent valuations or funding rounds, but apply a healthy dose of skepticism.
Also think about vesting cadence. If you are set to receive a meaningful tranche within the next few months, the marginal value of staying may be significant. If the next vest is a year away, the calculus becomes more complex.
Then, subtract potential taxes and consider opportunity cost. What could a new job or role offer in terms of compensation, equity refreshes, or growth potential that offsets the loss?
Tax Implications: The Often-Missed Piece
Equity compensation and taxes go hand-in-hand. Unvested RSUs, for example, are typically taxed as ordinary income when they vest. If staying means triggering a large taxable event next quarter, it is worth preparing in advance – or considering how that tax bill aligns with your broader financial picture.
Leaving before vesting means no income and no taxes on that equity. That can simplify things. It can also be painful to see a potential windfall vanish. The important thing is to model both outcomes, not just emotionally, but numerically.
If you are working with Incentive Stock Options (ISOs), early exercise rights, or vesting schedules tied to liquidity events like IPOs, the tax picture becomes even more nuanced. In those cases, consulting a tax professional or financial advisor is not optional – it is essential.
The Emotional Cost of Staying Stuck
Financial planning is not just math. It is also an emotion. Many professionals stay in roles long past their expiration date, not because they love the job, but because of the unvested equity dangling in front of them. That tension can breed resentment, stress, or even burnout.
There is also the risk of inertia. When compensation becomes the only reason to stay, professional growth often stalls. Over time, that can have its own cost, not only in career trajectory but in mental well-being.
Questions to Clarify Your Next Move
Here are a few prompts to help weigh the decision:
- What is the total value of unvested equity I would forfeit if I left today?
- When is my next major vesting milestone, and what is its value?
- How likely is it that the stock value will hold or increase?
- What new opportunities could I pursue if I were not waiting on this equity?
- How much does this compensation affect my long-term financial plan?
- What is the emotional cost of staying versus the potential risk of leaving?
Each answer provides context. Together, they create a picture that is less about fear or regret and more about clarity and confidence.
Aligning Equity With Life Goals
At the end of the day, equity compensation is just one tool in a broader plan. The goal is not to maximize every last dollar at the expense of your well-being. It is to build a life that works – financially, professionally, and personally.
For some, that means waiting it out until a key vesting date and walking away with peace of mind. For others, it means letting go of unvested shares to take a step that better aligns with long-term goals. Neither choice is right or wrong on its own. It only matters whether it fits your plan.
This article is intended for informational purposes only and should not be construed as individualized tax, investment, or legal advice. Please consult a qualified professional to evaluate your personal financial situation before making equity compensation decisions.
