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Can restricted stock units earn dividends before settlement?

RSUs Can’t Earn Dividends Prior to Settlement The shares underlying restricted stock units aren’t issued until the awards are settled. RSUs are simply a promise that the company will issue stock to the award holder in the future, after the vesting conditions have been achieved.

Are dividend equivalents paid on restricted stock units tax deductible?

Dividend equivalents paid on restricted stock units are treated as wages subject to federal income tax when paid to the employee. Dividend equivalents are typically paid out on a deferred basis (i.e., only when the underlying award is paid out).

Do restricted stock awards earn dividends?

Restricted Stock Typically Earns Dividends Because the shares underlying restricted stock are issued at grant, restricted stock awards are generally eligible for dividends paid after the grant date, even if the award hasn’t vested yet. This isn’t a legal requirement.

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