PlayInfoBox

Home /Investing /Stock Options and RSUs: A Resignation Checklist

Stock Options and RSUs: A Resignation Checklist

Before you hand in your resignation, work through these checks so you don't accidentally forfeit equity you've earned.

  1. Check your vesting schedule

    Confirm with your equity plan documents or HR how many of your granted stock options or RSUs have actually vested β€” meaning your right to them is already locked in β€” as opposed to shares still waiting to vest.

  2. Confirm what happens to unvested shares

    Most stock option and RSU agreements state that any unvested portion is automatically forfeited the moment you leave the company, so review the relevant clause in your own grant agreement rather than assuming a general rule applies.

  3. Check your post-termination exercise window

    Vested stock options usually come with a deadline to exercise them after you leave β€” often somewhere between 30 days and a few months β€” and missing that window typically means losing the right entirely, so confirm the exact deadline in writing.

  4. Know the exercise cost and tax impact

    Exercising an option means paying the strike price out of pocket, and depending on when you exercise and later sell, you may owe income tax or capital gains tax; it's worth a conversation with a tax professional before you commit.

  5. Understand how your RSUs settle

    RSUs usually convert to actual shares automatically once vested, with no exercise step required, but the settlement process, withholding, and reporting can differ by company and by country, especially if the shares are issued by an overseas parent company.

  6. Get everything confirmed in writing

    A verbal explanation from HR isn't enough if a dispute arises later β€” get your vested quantity, exercise deadline, and forfeited amount confirmed by email or an official letter, and keep a copy for your records.

Why this matters before you hand in notice

Equity compensation is often one of the largest financial components of a job, but it's also one of the easiest to lose through simple timing mistakes. Once you resign, the clock usually starts running immediately on both vesting (which stops) and exercise windows (which begin counting down), so reviewing these details before you give notice β€” not after β€” gives you room to negotiate your last day or exercise decisions if something looks unfavorable.

Common pitfalls people run into

The most frequent mistake is discovering the exercise deadline only after it has already passed, since many plans give as little as 30 to 90 days. Another common issue is underestimating the cash needed to exercise plus the resulting tax bill, which can be a meaningful expense with no guarantee the shares will hold their value. Finally, employees sometimes assume unvested shares will be paid out in some form, when in most standard agreements they are simply cancelled with no compensation.

Frequently Asked Questions

Can my employer extend the exercise deadline after I leave?

Some companies have discretion to extend the post-termination exercise window, and a number of employers have adopted longer standard windows specifically to reduce this pressure on departing staff, but it is never guaranteed β€” always check your specific grant agreement or ask HR directly rather than assuming an extension will be offered.

What if I can't afford to exercise my options before the deadline?

Options for this vary by company and country: some brokers or specialty lenders offer financing against vested options, and some companies allow a 'cashless exercise' where shares are sold immediately to cover the cost, but availability isn't universal, so confirm what your specific plan allows well before the deadline.