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How to get a make-whole grant for the RSUs you leave behind

A make-whole grant is cash or stock a new employer gives you to replace unvested equity you forfeit by leaving. How much it covers, and over what window, is up to the new employer, so it is often only part of what you lose, and cash usually comes with a repayment clause. Ask with exact numbers and negotiate the clawback. This is for anyone holding an offer, or expecting one, with RSUs still unvested. This page is not legal, tax, or financial advice.

What a make-whole grant is, and what it is not

It comes in three forms. A cash sign-on bonus. A grant of new RSUs on a faster schedule. Or a mix of both.

It is not a legal right. Your current plan decides what you forfeit, and leaving usually forfeits everything unvested. See what happens to unvested RSUs if you quit. The make-whole is a negotiated ask of the new employer. They can say no.

How much of your unvested equity a new employer will usually cover

Expect a negotiation, not the whole balance. The new employer decides how much of your unvested equity to replace, and over what window. In one CEO offer letter filed with the SEC, the make-whole covered only compensation that would have vested before the end of that year, and only after documents proved the amount. Treat the window as part of the ask.

The value is set at a recent market price, not the grant price. In another filed offer letter, the old equity was valued at the old employer's closing price on the start date, and the new units were counted using the new company's average price over the 20 trading days before it. If your stock has fallen since grant, the replacement is sized to today's value, so the drop is not covered.

Coverage is often partial.

How to calculate the number you bring to the table

  1. Open your plan portal. List each grant, its unvested units, and each vest date.
  2. Pick the window. Start with the next 12 months.
  3. Multiply the units vesting inside that window by today's price.
  4. Add any bonus you forfeit by leaving before its payout date.
  5. Compare after tax. In the US, a cash sign-on is wages, and RSUs are taxed as wages when they vest. Compare net to net.

Example, with invented round numbers. You have 400 units vesting in the next 12 months. The stock trades at $150. That is $60,000. You also give up a $15,000 bonus. Your ask is $75,000 before tax.

On withholding: the IRS flat rate for federal income tax on supplemental wages, such as a bonus, is 22%, and 37% on supplemental wages above $1 million in a year (IRS Publication 15). Withholding is not your final tax bill. A tax adviser can run your own numbers.

To put every forfeited piece in one figure, see the full cost of walking away.

Cash sign-on or replacement RSUs: which to ask for

Cash is certain. You know the amount on day one. The catch is the repayment clause, covered below.

Replacement RSUs carry upside and downside. If the new stock rises, you gain. If it falls, you lose. Ask for a faster vest than the standard schedule, such as monthly or quarterly through the first year, so the grant tracks the vests you gave up.

A mix is common. Cash for what vests soon, stock for the rest.

What vesting schedule a replacement grant should have

Ask for the replacement to vest on the dates you are giving up, or close to them. If 100 units would have vested in March, ask for a matching amount to vest in March, or soon after you start.

Avoid a one year cliff on make-whole stock. A cliff means nothing vests until your first anniversary. That leaves a gap in the first year, which is the gap the make-whole is meant to fill.

Keep the make-whole separate from the regular starting grant in the offer letter. Each one should show its own amount and its own schedule. That way, the replacement is not quietly folded into a grant you would have received anyway.

How to ask: a short script

Raise it before the offer is final. Send it in writing, with numbers.

"Thank you for the offer. Leaving means I forfeit $60,000 in RSUs that vest by [date], plus a $15,000 bonus paid in [month]. To make the move work, I am asking for a make-whole of $75,000. Cash, RSUs on a quarterly vest in year one, or a mix all work. I would also like any repayment to be prorated by months served, and waived if I am let go without cause. I can share my vesting statement."

If they will not move on a sign-on, the forfeited amount still gives you a number to point to. You can ask for a larger starting grant or a higher base salary instead. Base salary is harder to move, but it repeats every year.

Get the final terms in the signed offer before you resign.

The clawback: read it before you count the money

Make-whole cash usually comes with a repayment clause. Read these terms:

  • The service period: how long you must stay
  • Full or prorated: whether you repay everything, or only the share for time not served
  • Gross or net: whether you repay the pre-tax amount or what you actually received
  • Triggers: whether repayment applies if you are let go, not only if you quit

Ask for prorated repayment, and no repayment if you are let go without cause. Some states limit these terms. See whether you have to pay back a sign-on bonus if you quit. For large amounts, an employment lawyer in your state can review the clause.

When a make-whole grant is unlikely

Private company equity is hard to replace, because it is hard to value. A new employer may not accept a number with no market price.

It is also harder when the market is cold, when the role is junior, or when a startup has little cash.

If you are leaving because of a layoff, the ask goes to your current employer, not a new one. See negotiating unvested RSU vesting if you are laid off.

Is the move still worth it?

A make-whole covers part of what you lose. It does not answer whether the new offer is better over the next few years. Put salary, bonus, the starting grant, and the forfeited equity side by side. Then decide if leaving is worth it.

FAQ

Is a make-whole grant standard? It is common when someone is leaving meaningful unvested equity. It is never guaranteed.

Do companies cover all my unvested RSUs? Not always. The new employer picks the window and how much to cover, and often asks for documents that show what you forfeit.

What price do they use? A recent market price, not the grant price. Some filed offer letters use a short trailing average, such as 20 trading days, to count the new units.

Is a make-whole sign-on taxed differently? In the US, cash is taxed as wages in the year paid. RSUs are taxed as wages when they vest. Compare after tax.

Do I have to pay it back if I leave? Usually yes, if you leave within the service period. Ask for prorated repayment and no repayment if you are let go without cause.

What vesting schedule should a make-whole grant have? Ask for it to track the vest dates you forfeit, with no one year cliff.

Will they replace private company stock? Rarely, because it is hard to value.

When should I raise it? Before the offer is final, in writing, with your numbers.

Where can you check this, and run your own numbers?

Sources:

Related: What is walk-away cost? and Do I have to pay back my sign-on bonus if I quit?

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