What Happens to Unvested RSUs When You Switch Companies
Most senior professionals evaluating a new job offer run one calculation: does the new total compensation beat the old one? Base salary, bonus, sign-on grant; all added up and compared side by side.
The unvested equity being left behind rarely gets considered. It’s treated as a sunk cost, something already forfeited in spirit the moment the new offer showed up. That’s the wrong way to think about it. Unvested stock is real, quantifiable wealth — and understanding exactly what happens to it, and when, changes how a move should be planned and negotiated.
The default trap
A senior IT professional with four years at a company typically holds multiple overlapping grant tranches — the original joining grant, plus one or two refresh grants layered on top from subsequent years, each vesting on its own schedule. When an offer arrives from elsewhere, the instinct is to compare the new offer against current annual comp. But annual comp is only a partial picture of what’s at stake. The unvested balance sitting across those tranches is the number that actually determines whether a move makes sense.
What's actually being forfeited
In most standard RSU agreements, unvested shares lapse on the day employment ends. There is no partial credit for years already worked toward a four-year vest — if the cliff hasn’t passed, or if a tranche is still short of its date, that portion is simply gone.
A numerical example
Consider a senior engineer with the following unvested grants at the point of evaluating a new offer:
Grant | Original grant date | Total shares | Vesting schedule | Unvested shares remaining | Current stock price | Unvested value |
Joining grant | 3 years ago | 4,000 | 4-year, 25% annually | 1,000 | ₹2,400 | ₹24,00,000 |
Refresh grant 1 | 2 years ago | 1,600 | 4-year, 25% annually | 800 | ₹2,400 | ₹19,20,000 |
Refresh grant 2 | 1 year ago | 1,600 | 4-year, 25% annually | 1,200 | ₹2,400 | ₹28,80,000 |
Total unvested | ₹72,00,000 |
That’s roughly ₹72 lakh in unvested equity — money that doesn’t show up anywhere in a “current annual comp” comparison, because it isn’t income yet. It is forward-looking wealth already earned in principle through tenure, but not yet delivered. Walking away from it on day one of a new job is a real cost of the move, not a rounding error.
Timing considerations
The forfeiture isn’t binary across the whole balance — it depends on where each tranche sits relative to its next vest date.
Using the same example: suppose the next vesting event for Refresh Grant 2 is four months away, releasing 400 shares (₹9,60,000 at current price). Leaving four months early means forfeiting a vest that’s almost fully “earned” in time-served terms, even though it hasn’t technically crystallized. Leaving the week after that vest date instead captures the full ₹9.6 lakh with no change to the offer itself — the only variable is timing.
This is the calculation that gets skipped when a move is evaluated purely on offer comparison: what does staying an additional 90–120 days actually change financially, relative to what’s being negotiated on the other side? For senior professionals with large stacked balances, a short delay can be worth materially more than most sign-on negotiating room.
Negotiating the replacement
New employers frequently offer a “make-whole” grant intended to offset what’s forfeited — but make-whole grants rarely match on comparable terms, and the mismatch is where value quietly disappears:
- Vesting schedule — a forfeited grant that was 60% of the way through its four-year vest is being replaced by a fresh grant starting its own four-year clock from zero.
- Liquidity — if the new company is private or pre-IPO, RSUs already vested and liquid (or vesting into a listed stock) are being traded for equity with an unknown liquidity timeline.
- Valuation risk — a make-whole grant priced off a private company’s last funding round carries markup risk that a listed company’s RSU does not.
A ₹72 lakh forfeiture “matched” by an ₹72 lakh sign-on grant is not actually an even trade once these three factors are accounted for — the replacement grant needs to be evaluated on its own risk profile, not just its headline value.
The portfolio-level question
Beyond the immediate trade, there’s a longer question worth asking before signing anything: does this move change overall concentration risk, or just move it from one company to another? A senior professional moving from one large listed tech company to another has effectively swapped one single-stock exposure for another — the underlying risk of holding a large share of net worth in one employer’s stock hasn’t gone away, it just changed names.
Closing thoughts
The right question isn’t “does the new offer beat the old comp.” It’s: what is being given up, on what timeline, and what is it actually being replaced with — evaluated as one continuous portfolio decision, not two separate offers.
- Sep 28, 2026
Family Office | Estate Planning | Tax Services | ESOP Advisory | Company Incorporations | Mutual Funds | PMS | Bonds | AIF | Offshore Investing | Private Equity and Venture Capital Funds
Disclaimer: All the above views are for educational purposes and are not given as investment advice.
If our approach resonates with you, let’s discuss how your portfolio aligns with your long-term goals
About Author
Sri Subhash Yerneni
Sri Subhash is an astute banking and finance professional with 14 years of real-world experience in wealth management, advisory of financial instruments such as mutual funds-equity and debt-alternate investment funds ( AIF)-structure and offshore products-private equity-venture capital/debt-bonds and MLDs-priority banking-cash management-team management-and working with various cultures in various nations.
AMFI-registered Mutual Fund Distributor – ARN 257866
AMFI-registered SIF Distributor – ARN 257866
APMI PMS Distributor – APRN00458
Follow Us:
Quick Links
Services
Services
Contact Info
3rd Floor, Plot No. 55/A, Rd No 52, BNR Hills, Jubilee Hills, Rai Durg, Hyderabad - 500081
Copyright © 2025 VIKA WEALTH – All Rights Reserved.
AMFI-registered Mutual Fund Distributor – ARN 257866
AMFI-registered SIF Distributor – ARN 257866
APMI PMS Distributor – APRN00458
Quick Links
Services
Contact Info
3rd Floor, Plot No. 55/A, Rd No 52, BNR Hills, Jubilee Hills, Rai Durg, Hyderabad - 500081
Copyright © 2025 VIKA WEALTH – All Rights Reserved.