If you've been at your company for a few years and keep getting refresher grants on top of your original sign-on grant, your position in employer stock has almost certainly grown, even if you haven't sold or bought a single extra share on purpose. You didn't decide to increase your bet on one company. It happened anyway, one vesting event at a time.
This post is about that specific problem: how concentration builds passively through repeated refreshers, how to actually count what you're exposed to (not just what's vested and sitting in your brokerage account), and a systematic way to keep it from taking over your net worth.
If you want the mechanics of what a refresher grant is and how it's typically sized and timed, that's covered in What Are RSU Refresher Grants and How Do They Work?.
Table of contents
- Why refresher grants are different from your first grant
- How concentration compounds, mechanically
- How to count your actual future exposure
- Why this is easy to ignore
- A systematic rule for repeated grants
- Questions worth asking at your next compensation review
Why refresher grants are different from your first grant
Your sign-on grant was a known, one-time exposure. You joined, you got a grant, it vested over a few years, and once fully vested, your equity comp exposure to that one company was capped, at least until you got promoted or the company handed out another grant.
Refresher grants remove that cap. Most companies that use them issue a new grant every year, often timed to performance reviews, and each new grant starts its own multi-year vesting clock, layered on top of whatever is still vesting from prior grants. The result is that at almost any point in your tenure, you have several overlapping vesting schedules running at once, all in the same stock.
Nobody sits down and says 'I am now going to hold three, four, or five years of unvested company stock.' It builds up as a byproduct of staying employed and being a decent performer. That's exactly what makes it easy to miss.
How concentration compounds, mechanically
Each RSU vesting event is a separate transaction for tax purposes.
Every time a tranche vests, whether from your original grant or a refresher, it creates its own vesting lot with its own vest date, its own fair market value, and its own cost basis, and each lot has to be tracked independently rather than merged with other lots when you eventually sell.
Most employees don't receive all their RSUs in one shot. Instead they vest in tranches over months or years, and a refresher grant simply adds more tranches to a pile that was already accumulating.
From a concentration standpoint, this matters because every one of those tranches, past and future, is exposure to the same single company. Your salary already depends on that company. Your bonus, if it's tied to company performance, depends on it too. And now a growing share of your investable net worth depends on it as well.
None of these are diversified against each other. If the company has a bad year, your income, your bonus, and your portfolio can all take a hit at the same time.
Example. Suppose you joined a company with a four-year sign-on grant and, starting in year two, received an annual refresher grant that also vests over four years.
By year four, you have vested shares sitting in your brokerage account from your original grant, plus multiple unvested tranches still running from refresher grants issued in years two, three, and four.
If you never sell any vested shares and never adjust for new grants, your dollar exposure to that one company keeps climbing every single year you stay, purely as a function of tenure, not any active decision to buy more.
How to count your actual future exposure
Most people who check their concentration only look at what's sitting in their brokerage account today, the shares that have already vested. That understates the real number. To get an honest picture, you need to count three things together:
- Vested shares you're holding. This is the easy part. Whatever is in your brokerage account, at current market value.
- Unvested RSUs still on the clock. These aren't yours yet. Unvested shares are a promise of future shares, conditional on you continuing to meet your vesting schedule, and if you leave your employer before they vest, they're forfeited entirely and you owe no tax on the shares you never received. That's exactly why unvested value shouldn't be counted the same way as vested value.
It's real exposure if you stay, but it carries forfeiture risk that vested shares don't, so weight it as a probability-adjusted number (multiply by how likely you are to still be there and still be granted that tranche), not the full face value.
- Expected future refresher grants. If your company has a track record of granting refreshers annually, and you expect to stay, you should assume more grants are coming, even though they haven't been awarded yet. This is the part people miss most often. If your last two refreshers were roughly similar in size, a reasonable planning assumption is that the next one or two will be comparable, and you should factor that into how concentrated your exposure is trending, not just where it stands today.
Add those three together and compare the total to your overall net worth, not just your investable portfolio. If employer stock (vested, unvested, and reasonably expected future grants) adds up to a large share of what you actually own, including your home equity, retirement accounts, and other savings, you're more concentrated than your brokerage statement alone would suggest.
The calculation above is a planning framework for estimating forward exposure, not a tax or regulatory rule. How much weight to give future expected grants is a judgment call you make based on your own company's track record and your own career plans.
Why this is easy to ignore
A few reasons this creeps up on people:
- Nothing about a refresher feels like a new decision. It shows up as part of a performance review or comp cycle, framed as a reward, not as 'would you like to increase your bet on this one stock.' Nobody frames it that way, so nobody evaluates it that way.
- Vesting is gradual. Each individual vesting event might only be a few thousand dollars. It's easy to not notice the cumulative total because you're never looking at one big number, you're looking at a string of small ones.
- The tax bill at vesting already feels like a cost. Employers usually deduct TDS under Section 192 of the Income-tax Act when RSUs vest, and people sometimes treat that withholding as 'dealing with the tax' and stop there, without separately deciding whether to also sell down the rest for concentration reasons.
A systematic rule for repeated grants
You need to decide, in advance and independent of how you feel about the stock on any given day, how much single-company exposure you're willing to carry, and to sell back down to that line every time a new tranche vests.
A simple version of this: pick a cap, say employer stock should never exceed a fixed percentage of your total net worth, or a fixed number of months of expenses.
Every time RSUs vest, check your position against that cap. If you're over it, sell the excess down to the line, regardless of whether the stock is up or down that week, regardless of the news cycle, regardless of how confident you feel. The whole point of a rule is that it removes the daily judgment call.
This becomes more important, not less, the more refresher grants you receive, because each new grant is another periodic re-injection of concentration that will need to be worked back down. A rule you set once and apply automatically at every vest scales with an arbitrary number of future refreshers in a way that a one-off decision doesn't.
A few things worth keeping in mind specifically because of refresher grants:
- Every tranche you sell, whether from your original grant or a refresher, has its own cost basis (the fair market value on that lot's specific vesting date, before withholding). Lots from different vesting events cannot be combined into a single gain or loss calculation when you sell, so a systematic sell needs to track which lots it's drawing from.
- Holding period is counted separately per lot too. Shares held up to 24 months from their own vesting date are short-term capital gains taxed at your slab rate, and shares held beyond 24 months from vesting are long-term capital gains taxed at 12.5% without indexation. The tax rate depends on the lot that's being sold.
Questions worth asking at your next compensation review
Since refresher grants are usually decided during performance or comp reviews, that's also the natural moment to ask about your forward concentration, not just your headline comp number:
- What's the expected size and timing of my next refresher grant, roughly, based on past cycles?
- How does my total unvested position (original grant plus refreshers) compare, as a rough percentage, to my total comp?
- Is there a company policy or blackout window that would restrict when I can sell vested shares, so I can plan my selling rule around it rather than around news events?
None of these require the company to commit to anything. They're there to help you keep your own running estimate of future exposure current, which is the input your selling rule depends on.
