Restricted Stock is a type of stock that is issued to an employee of a company as part of their compensation package. It is called "restricted" because it is subject to certain vesting requirements, which means that the employee must meet certain conditions in order to be able to sell or transfer the stock. These vesting requirements are typically tied to the employee's length of service with the company or the achievement of certain performance milestones.When an employee is granted restricted stock, they are typically given the right to vote the stock, but they do not have the right to sell or transfer it until the vesting requirements have been met. Once the vesting requirements have been met, the stock becomes unrestricted and the employee can sell or transfer it like any other stock.The taxation of restricted stock depends on whether it is granted as a non-qualified stock option or as a qualified stock option under an employee stock purchase plan. Non-qualified stock options are taxed as ordinary income at the time they vest, while qualified stock options are taxed as capital gains at the time they are sold.If you are considering selling restricted stock, it is important to consult with a financial advisor or tax professional to understand the tax implications of your sale.
