Restricted Stock Units (RSUs) from Amazon represent a form of employee compensation that vests over a period. A common vesting schedule spans four years, meaning that a portion of the granted RSUs becomes accessible to the employee incrementally during this timeframe. For instance, an employee might receive a grant of RSUs that vest in increments of 5%, 15%, 40%, and 40% over the four-year period. These vested shares then become the employee’s property, subject to applicable taxes.
This equity-based compensation serves to align employee interests with the company’s long-term growth and success. It incentivizes retention and encourages employees to contribute to the sustained prosperity of the organization. The practice of awarding equity as part of compensation packages has become increasingly prevalent in the technology sector, particularly for attracting and retaining top talent.
