Google RSUs (GSUs): Making Smart Decisions With Your Equity Compensation
Working at Google (Alphabet) often means a competitive salary, great perks, and a significant portion of your compensation in Google stock — specifically, Restricted Stock Units, or GSUs (Google’s name for RSUs). These can be a powerful part of your financial life, but they come with rules and tax implications that are important to understand.
What Are Google Stock Units (GSUs)?
GSUs are Google’s version of Restricted Stock Units (RSUs). Think of them as a bonus paid in company stock instead of cash.
You are granted a certain number of GSUs, but you do not actually own the shares until they vest. Vesting typically happens over time and is often tied to continued employment and performance. Once the restriction is satisfied, the shares are yours.
Unlike stock options, GSUs always have value once they vest. You do not have to pay anything to receive them. That’s a big deal.
Google intentionally moved away from traditional stock options years ago because options can expire worthless if the stock price falls. GSUs, on the other hand, are full shares. Even if the stock price drops, vested shares still hold value.
This structure was designed to reward long-term commitment and performance, while also reducing some of the risk employees experienced with stock options.
Why Google’s Equity Program Is So Unique
Google has spent years refining its equity compensation program. After the IPO, leadership recognized that attracting and retaining top talent required something more thoughtful than traditional stock options.
Here’s what Google did differently:
Shifted from stock options to RSUs so equity always had value
Created tiered vesting schedules so employees could access shares sooner
Built internal tools allowing employees to model future equity value alongside salary and bonuses
Clearly communicated how equity decisions impacted individuals, not just in theory but in real dollars
Over time, GSUs evolved from standard RSUs into something more dynamic. The number of shares that ultimately vest can scale based on performance, meaning higher performance can result in more shares than originally granted. In simple terms, GSUs function a lot like a performance-based bonus system, paid in stock.
This thoughtful design is one of the reasons equity remains such a meaningful part of compensation for Googlers.
How GSUs Are Taxed
Taxes are where most people get tripped up.
Taxes at Vesting
When your GSUs vest, the fair market value of the shares is treated as ordinary income. This amount shows up on your W-2, just like your salary or cash bonus.
Google will automatically withhold some shares to cover taxes, but the default withholding rate is often not enough for higher earners. This is one of the most common surprises I see.
Taxes When You Sell
After vesting, any future change in value is taxed as capital gains or losses:
Sell within one year of vesting and gains are short-term
Sell after one year and gains may qualify for long-term capital gains rates
Your cost basis is the stock price on the vesting date, not the grant date.
The Most Important Question to Ask Yourself
Every time GSUs vest, ask this one question:
If this amount showed up in my checking account as cash, would I immediately use it to buy my company’s stock?
If the answer is yes, holding may make sense
If the answer is no, selling when they vest is often the cleaner, lower-risk choice
This mindset removes emotion and helps you treat GSUs like the income they truly are.
The Employee Trading Plan (ETP): What to Know
If you are subject to trading restrictions, Google’s Employee Trading Plan (ETP) is especially important.
The ETP allows eligible employees to set up pre-scheduled trading instructions during open trading windows. Once enrolled, trades can automatically occur during future blackout periods, as long as the plan was established properly in advance.
Why this matters:
It reduces the risk of accidentally violating insider trading rules
It removes emotion from selling decisions
It allows for consistent diversification over time
ETPs are often used to sell shares shortly after vesting or on a scheduled cadence, which can be helpful for tax planning, cash flow, and reducing stock concentration.
The key is that ETPs must be set up before blackout periods begin, and once in place, changes are limited. This is an area where coordination matters.
Concentration Risk: The Quiet Risk No One Talks About
GSUs can quietly create risk because:
Your paycheck comes from Google
Your benefits come from Google
Your equity value is tied to Google
That’s a lot riding on one company, no matter how strong it is.
Many people feel loyal to their employer’s stock, which is completely understandable. But diversification is not about pessimism, it is about resilience. Selling some shares does not mean you lack confidence in the company. It means you are protecting your broader financial life.
Putting It All Together
GSUs are a generous and well-designed benefit, but they are not a financial plan by themselves.
Managing them well means:
Understanding the tax impact at vesting
Making intentional decisions about selling versus holding
Planning for tax payments beyond default withholding
Using tools like the ETP to stay compliant and disciplined
Aligning equity decisions with your bigger goals
Handled thoughtfully, GSUs can support long-term wealth and flexibility. Ignored, they can create unnecessary tax bills, tax penalties, and risk.
The goal is not to guess the future of Google’s stock. The goal is to make smart, repeatable decisions that support the life you want to build.
Do you want to work with a financial planner who can help you evaluate your biggest financial decisions from the perspective of what has the best chance of funding your best life? Reach out and schedule a free consultation.
This article is for educational purposes and does not constitute personalized financial advice. Always consult a qualified financial advisor before implementing complex financial strategies.
