There's A Difference Between Restricted Stock And Restricted Stock Units

Restricted stock and restricted stock units (RSUs) -- they're the same thing, right? This is one of the most common misconceptions about these equity vehicles. Actually, use of these two types of equity grants could lead to very different outcomes for both the grantor and recipient.

As many organizations seek to improve their "pay-for-performance" compensation philosophy, they often create long-term incentive plans that allow executives and employees to earn additional compensation in the form of equity. Typically, equity is earned though the achievement of organizational and/or individual performance goals or through remaining employed with the organization for a specific period of time. If planned correctly, these plans will allow organizations to attract and retain organizational talent while allowing executives and employees to share in the organization's success.