How does the capital of existing investors get affected when a company offers RSU to directors?
The term restricted stock unit (RSU) is an award of stock shares, usually as a form of employee compensation, that comes with conditions that typically include a vesting period before they are transferred to the owner.
Restricted stock units are issued to employees through a vesting plan and distribution schedule after they achieve required performance milestones or upon remaining with their employer for a particular length of time.
RSUs give employees interest in company stock but have no tangible value until vesting. The RSUs are assigned a fair market value (FMV) when they vest. They are considered income once vested, and a portion of the shares is withheld to pay income taxes. The employee then receives the remaining shares and has the right to sell them.
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