Investing
RSU (Restricted Stock Unit)
A form of equity compensation: an employer's promise to deliver company shares (or their cash equivalent) to an employee on a future vesting date, typically over several years. When RSUs vest, the full market value of the shares is taxed as employment income in Canada (added to your T4) and the shares land in your brokerage account at a cost base equal to that vesting price. Any subsequent gain or loss when you sell is then a capital gain or loss. Concentrated RSU positions are one of the most common reasons clients come to us — the planning question is usually how quickly to diversify out of company stock and how to fund the resulting tax bill.
Related terms in Investing
How your portfolio is divided across asset classes — equities, fixed income, cash, real assets — chosen to match your goals, time horizon, and risk tolerance.
Spreading investments across different securities, sectors, and geographies to reduce the impact any single holding can have on the portfolio.
A cash (or sometimes stock) payment a company distributes to its shareholders out of profits, typically on a quarterly schedule. Dividends are one of the two ways equity investors earn a return; the other is price appreciation. In Canada, dividends from Canadian corporations receive preferential tax treatment via the dividend tax credit, while dividends from foreign companies (including U.S. ones) are taxed as ordinary income and may have foreign withholding tax applied.
A pooled investment that trades on an exchange like a stock. ETFs typically offer low management expense ratios (MERs) and track an index, sector, or strategy.