Carta open forum

Hi All,

We are preparing to grant RSUs for the first time to a few individuals. As this is also my first time issuing RSUs in Carta, I'm looking to get some advice on the pain points anyone has faced - whether that be the settling/vesting/tax piece, etc. as we land on vesting/settling quarterly. 

Really appreciate any input - thanks!

Hi Anthony - The biggest thing that pops up for us is the vesting piece (which is then tied to the tax piece).  I would say that, in our practice, pretty much every RSU grant has double-trigger vesting.  Employees can sometimes have some issues with double-trigger, but once it's all explained to them, and once they weigh the pros and cons, it's typically not a lasting issue.

In two cases in the past year, RSUs were initially granted as single-trigger (prior to receiving counsel), and we ended up voided those and re-granting RSUs with double-trigger. 

If you do decide to go with single-trigger vesting, the biggest pain then becomes maintaining the settle schedule.  I've seen this go awry (mainly when roles/staff members change and the schedule falls through the cracks) and I can tell you that investors do NOT like to see this during the diligence process.

Hope this helps!

Hi Anthony,

How exciting! Granting RSUs for the first time comes with a bit of a learning curve, so it's great that you're thinking ahead. Here are a few things that come to mind:

• Spend time on education – Since this is likely a new type of equity for recipients, you'll want to make sure they really understand how it works. Expect questions about taxation, vesting, and settlement mechanics. Having clear communication, an FAQ, or a quick reference guide can go a long way in avoiding confusion. And make sure to provide education not only at the time of grant but also at vesting events, etc. This helps award holders feel confident in their awards, reduces questions, and ensures they get information when it matters most.

• Run a mock vesting & settlement in Carta – RSU taxation and settlement tracking can get complicated, so it's a good idea to run a mock settlement before the first real one. This helps catch any surprises and ensures everything runs smoothly.

  • Tax Withholding Accuracy – Make sure the right withholding method (sell-to-cover, net settlement, etc.) is applied and that tax rates match payroll expectations. Common issues include incorrect tax rates and missing jurisdictional requirements.
  • Cash vs. Share Settlement – If using net settlement, check that the correct number of shares are withheld for taxes and participants receive what they expect. If using sell-to-cover, confirm that the process is working properly, and employees get the right proceeds.

A quick mock settlement can help prevent last-minute issues and make the experience seamless for both participants and internal teams.

Would love to hear how things go! Let me know if you run into any surprises-happy to chat.