How do T-Mobile’s RSUs work?
Restricted Stock Units are generally granted each February and vest over two or three years. Employees receive shares of T-Mobile stock if they remain employed with the company.
In February 2024, T-Mobile started issuing grants that vest every six months - in August and February. Restricted Stock Units granted before 2024 will continue to vest annually.
The number of RSUs granted depends on pay level. More Restricted Stock Units are granted at higher pay levels.
It almost always makes sense to accept grants when they’re offered. Some situations could result in some or all of the units vesting such as a layoff, death, or disability.
T-Mobile RSU example
Let’s say someone accepts a grant of 54 units which vest over three years. Each year, 18 units vest. The units become shares of TMUS.
Some units are sold to cover taxes. Let’s say 5 of the 18 shares are sold.
The remaining 13 shares are deposited into the employee’s account. They’re worth the stock price times the 13 shares.
It’s like a bonus paid in stock! Selling right away has no tax impact.
For more, check out:
What to Do with RSUs?
How Are RSUs Taxed?
Is It Worth Holding Employer Stock?
How does T-Mobile’s ESPP work?
T-Mobile’s Employee Stock Purchase Plan (ESPP) occurs every six months. Employees set aside money each paycheck to later purchase shares at a discount.
That discount is 15% off the lesser of the TMUS share price at the:
beginning and
end of the six months.
The discount will be more than 15% if T-Mobile’s stock share price rises over the six months!
T-Mobile ESPP example
Let’s say someone contributes $769.23 per paycheck for six months. Shares of TMUS rise 10% from $220 to $242.
The purchase price would be $187 (15% off $220). However, it would be worth $242 on the open market.
The employee may be able to sell the shares right away. They would trade about $10,000 for $12,941. That’s a 29% gain in just six months.
For more, check out:
How Does an ESPP Work?
Are Employee Stock Purchase Plans Underrated?
Own Stock or Contribute to ESPP?
Kevin Estes is a financial planner helping T-Mobile employees and their families live their best lives.
He worked in T-Mobile Financial Planning & Analysis for nine years. Kevin received a certificate in financial planning, passed the CERTIFIED FINANCIAL PLANNER™ exam, and founded Scaled Financed in 2022.
