The Moment
You work at a tech company and RSUs are a significant part of your compensation — often 30-60% of total comp at mid-to-senior levels. When a batch vests, it might be $20,000, $50,000, or $100,000+ appearing in your brokerage account.
The temptation to hold is strong: your company is growing, the stock has performed well, and selling feels like betting against your own employer. But the concentration risk in tech is particularly severe.
Why Tech Concentration Is Especially Dangerous
Your entire financial life depends on one company: - Salary: from the company - Bonus: from the company - Unvested RSUs: from the company - Vested RSUs (if you hold): from the company - Job stability: depends on the company
If the company has a bad year, ALL of these decline simultaneously. You get laid off, your bonus is cut, your unvested RSUs lose value, and the shares you held drop.
Real examples of tech stock declines: - Meta (Facebook): -77% in 2022 (recovered later, but devastating if you sold at the bottom or were laid off) - Netflix: -75% in 2022 - Amazon: -56% in 2022 - Many pre-IPO/growth companies: -80-95% and never recovered
The math of concentration: If company stock is 40% of your net worth and drops 50%, your net worth drops 20%. If you had diversified into index funds, the same market decline might reduce your portfolio by 10-15% (since indexes hold thousands of companies, not one).
The sell-at-vesting discipline: Treat every RSU vesting like a cash bonus. Sell the shares. Invest the proceeds in a diversified index fund. Your unvested RSUs already provide plenty of company exposure for the upside case.
Run Your Numbers
Enter your RSU value and total comp to see concentration risk.
$50,000 Windfall Allocator
What to explore next
- →How do I set up a 10b5-1 automated selling plan?
- →How do I coordinate RSU selling with ESPP?
- →What percentage of my portfolio should be company stock?
Frequently Asked Questions
Everyone at my company holds their shares — am I wrong to sell?
Survivorship bias. You hear about the people who held and the stock went up. You do not hear about the people who held and the stock dropped 70%, or whose company was acquired at a loss, or who were laid off during a decline. The employees who diversify do not have dramatic stories — they just quietly build wealth. That is the goal.
Should I set up a 10b5-1 plan?
If your company requires trading windows (most public tech companies do), a 10b5-1 plan automates your selling on a predetermined schedule. You set it up during an open trading window and it executes automatically, even during blackout periods. This is the gold standard for disciplined RSU management.