Financial Planning
Double-Trigger RSUs: Separate Service Vesting From Settlement
Build a two-condition RSU timeline that keeps service progress, final vesting, settlement and issued shares distinct.
What you will learn
- Track service and liquidity conditions independently.
- Distinguish satisfied conditions from an actual share delivery.
- Identify why a service-completed tranche can still depend on other award terms.
A double-trigger RSU can require two independent conditions before an award tranche completes vesting. Track the service condition and the specified liquidity condition separately, then track settlement separately again. Completing service time is not proof that shares have been delivered or can be sold.
Use the award’s definitions
The IRS equity-compensation guide, printed page 14 describes RSUs as future cash or stock promises. Different documents can use different language for “vested,” “earned” and “settled.” Give each term a precise meaning in your worksheet rather than assuming one label answers every question.
A RSU form in Sumo Logic’s 2010 stock plan, amended in 2020 and filed with the SEC illustrates a service requirement plus a separate defined liquidity requirement. That form also contains continued-service conditions. It is an historical example, not a promise that another holder keeps every service-completed tranche after leaving.
Start with a two-condition table
Assume both conditions are required for the tested tranche
| Service condition | Defined liquidity condition | What the worksheet can conclude |
|---|---|---|
| Not met | Not met | Tranche incomplete |
| Met | Not met | Service progress recorded; full conditions incomplete |
| Not met | Met | Liquidity event alone does not complete the tranche |
| Met | Met | Conditions complete under the assumed rule; confirm settlement separately |
| Unconfirmed | Met or not met | Pending confirmation, not an invented result |
This table is a reading aid. The actual award may have additional expiry, service, event-definition, payment or forfeiture terms.
Work a fictional timeline
Fictional terms:12,000 stock-delivery RSUs have 16 equal quarterly service tranches. Each tranche also requires a defined liquidity event. At the event, only service-completed tranches complete vesting, and the example’s administrator later confirms delivery. Assume service continues throughout and no other condition fails.
One award, several different states
| Point | Service-completed units | Fully vested under the teaching terms | Shares actually delivered |
|---|---|---|---|
| After 4 quarters, no liquidity event | 3,000 | 0 | 0 |
| After 8 quarters, still no event | 6,000 | 0 | 0 |
| Defined event confirmed at that point | 6,000 | 6,000 | 0, delivery pending |
| Later confirmed settlement of those tranches | 6,000 | 6,000 | 6,000 |
Each quarter contributes 750 units. After the modeled delivery,6,000 units remain subject to future service conditions. Do not add the already delivered 6,000 to the original 12,000 and report 18,000 awards.
Ask what happens before and after an event
Which event definition applies: an IPO, a later lockup-related date, a qualifying sale or another specific event? Must the person remain in service through that event? What happens if the event never occurs before an award expires? Those are document questions, not conclusions from the phrase “double trigger.”
Nor is a liquidity condition the same as permission to sell on a public exchange. The award’s settlement status and any sale restrictions still need confirmation. The cap-table review checklist helps distinguish promises, awards and issued securities in the source records.
Build the evidence register
Award / plan / amendment version:
Service condition and quantity satisfied:
Liquidity-event definition and confirmation:
Continued-service / expiry / forfeiture questions:
Both conditions complete? [yes/no/unconfirmed]
Settlement instruction and actual delivery record:
Sale restrictions still unresolved:
Question / owner / next confirmation:Keep tax treatment outside this state table. It does not determine whether a specific date creates income or any particular filing obligation.
Make the next conversation clear
Keep an authorized state summary in Finta Documents. Ask Aurora to help turn the unresolved fields into questions for the company’s finance and legal contacts. For broader practical education, explore Finta Academy. No stock is granted, settled or sold by completing this worksheet.
Finta Field Guide. By Finta Editorial Team. Sources checked November 14, 2026. Examples are original, fictional teaching cases, not customer results or individualized legal, tax, accounting or investment advice.