Check these out on your own. If you think it is worth staying because of a massive payout, think again.
---> Expect ~40% to disappear instantly via "sell-to-cover" on the day the RSUs vest.
----> Anticipate an additional tax bill of roughly $20 to $33 for every $1,000 of gross RSUs vested.
Choose your future wisely. Go look this crud up yourself.
Posting because people say "kick back and let everything just increase with RSUs and ESPP". RESEARCH THESE YOURSELF.
Bullet points...
Under Cisco’s standard severance agreements, Cisco typically accelerates the vesting of RSUs that would have vested through a specific forward date (often the next major vesting milestone or up to a few months out).
The True Tax Cost: 25% to 50%+ (Based on your total annual income)
When these accelerated RSUs vest on your termination date, they are treated exactly like a cash bonus (supplemental ordinary income). You are taxed on the Fair Market Value (FMV) of the stock on the day it vests.
Because the federal government mandates a flat 22% withholding for RSUs, you will likely owe extra tax at April filing time if your total annual income puts you in the 24%, 32%, 35%, or 37% federal tax brackets.
Employee Stock Purchase Plan (ESPP)
Option A: Disqualifying Disposition (Held 2 years from offer start AND > 1 year from purchase date)
If you have held the shares past both milestones:
Ordinary Income Tax Rate (12% to 37%): You pay ordinary income tax only on the lesser of: the actual profit, or the 15% discount based on the stock price at the start of the offering period.
Long-Term Capital Gains Rate (0%, 15%, or 20%): All remaining profit is taxed at the much lower long-term capital gains rate. For most tech professionals, this rate is 15%.