Yes, we are in the U.S., but our situation seems quite different from the standard RSU process you described.
We did not receive a W-2, and the company has not reported the RSUs as taxable income yet.
Even though our RSUs fully vested at IPO, they are not yet settled as shares—the company has set the settlement date to March 15, 2025.
The company is requiring us to prepay withholding taxes in cash before they release the shares. If we don’t pay by the deadline, the RSUs will be forfeited entirely.
This is why we are trying to better understand how this aligns with U.S. tax laws and whether this is standard practice.
We agree that this doesn’t sound like how RSUs typically work in the U.S., which is why we are seeking advice. If you have any thoughts on how this situation might fit within U.S. tax regulations, we’d really appreciate your perspective!
I talked to someone who is a Chief Accounting Officer. First off, to be perfectly blunt, you were foolish to wait until 30 days before this occurred before asking questions.
The company has an obligation to withhold tax to the IRS. It sounds like the company doesn't want to spend its own cash to pay this withholding tax so they are forcing ex-employees to fork over the cash, with the threat of forfeiting their shares.
This doesn't sound legal unless it was spelled out in your employee equity grant. The fact that you would forfeit your shares seems wrong. I would read over whatever equity grants you signed.
However the benefit is that you get 100% of your shares and you don't lose any shares to taxes. You could talk to a lawyer but unless you don't have the money to pay the withholding tax (22% of the opening price of the shares on the settlement date unless you own more than $1 million, which then becomes 37%), I would just pay as little as possible and get the shares.
If it is legal, it's the company being an asshole and being really shitty to their ex-employees. Please name and shame them so that we can avoid them.
I am sorry that you had to go through such shenanigans. Consulting a lawyer is also what we are working on right now. Asking just in case: do you have any lawyer to recommend? Thanks!
In case you don’t have much experience working with lawyers, start your conversation with them by saying, “The outcome I want is _________________.”
If you don’t do this, the lawyer will likely talk about many options, none of which will match your desired outcome. They also generally charge by the hour so you’ll be paying to hear about things you don’t care about.
> It could have been a double trigger vesting arrangement, where the shares "semi-vest" over time, but then they don't fully vest until a liquidity event, at which point poof suddenly all of those ghost shares become REAL shares.
Exactly this.
> If that's the case, they likely baked in a process for employees to have those shares withheld, or auto-sold during the lockup period. It's all tied in with their HR system and other payroll processes to make that easy.
In the agreement, they said this is up to the company, and the company chose the "pay tax to me or forfeit" option.
> There are companies that will loan you money to cover vesting costs or these types of situations - they'll do it at shitty rates, but if the options are losing out on a windfall or losing an extra 10-20% on the windfall, it's worth considering.
Thanks for this advice. Agree that this seems like a viable approach. Appreciate it!
Thanks for mentioning the safe harbor rule. We are actually aware of that.
The issue here is that the company is asking the payment directly to the company's bank account, or the RSUs will be forfeited forever. This makes the situation much worse IMHO.
Right, the safe harbor rule isn't relevant here. The company is required to do withholding at the time the shares are delivered to you. They've chosen the most burdensome method for you as the only option. I'm not sure there's a way to legally force them to allow a sell-to-cover option, but I really hope so for y'all's sake. This feels really shady.
The shares are not in our brokerage account yet. According to the company, they need to confirm the tax payment to the company before the shares are transferred to the personal brokerage account.
You don’t own shares. You own a right to future shares. Borrow against that. (If you want to roll your own loan, sell a deliverable forward. Again, not legal advice!)
1. There are many services that is already "implemented" in NixOS, with sane default configurations and easy to customize (because the contributors have designed good abstractions, and also because of the flexibility of Nix language). One good example is `nginx`. Btw `paperless-ngx` and `jellyfin` are also already implemented. In this case you do not need to use docker at all.
2. Because of the good abstraction in the service implementation, I usually do not need to go very deep to understand the common configurable options for each of the services.
3. All those services become systemd services once up. As long as you are familiar with how to manage systemd services at runtime, you know how to work with them.
4. Even for those ones that do not exist in NixOS, as the authoer suggested you can still start them as docker-based systemd services, with very simple and intuitive nix configurations.
5. NixOS configuration are mostly deterministic and modular. I can use git to manage all the configurations for different servers. There can be occasions that I will need to migrate the services to a differen machine (e.g. upgrade, replicate, ...). With the NixOS configuration of those services, I can simply re-use the configuration code and have a very high confidence that they will work as expected on a new machine.
6. The above also makes it very easy to revert my deployment to any previous successful version. Without having to worry about breaking anything, it also gives me the confidence to quickly try out different ideas.
The contributors to nixpkgs for the most part, the whole thing is on github and it's one of (if not the) largest Linux package repo of any distro. You can override defaults easily. Security updates are handled by updating your nix channel and rebuilding the system, or updating your flake and a rebuild (if the maintainer has released a more recent version, if they haven't you can make an overlay and bump the version, add your own patches to the build or 'derivation'. Rollbacks are baked in until you remove them from the 'nix store'. You can configure all the things!
1. There are many services that is already "implemented" in NixOS, with sane default configurations and easy to customize (because the contributors have designed good abstractions, and also because of the flexibility of Nix language). One good example is `nginx`. Btw `paperless-ngx` and `jellyfin
2. Because of the good abstraction in the service implementation, I usually do not need to go very deep to understand the common configurable options for each of the services.
I understand `pandas` is widely used in finance and quantitative trading, but it does not seem to be the best fit especially when you want your research code to be quickly ported to production.
We found `numpy` and `jax` to be a good trade-off between "too high level to optimize" and "too low level to understand". Therefore in our hedge fund we just build data structures and helper functions on top of them. The downside of the above combination is on sparse data, for which we call wrapped c++/rust code in python.
