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Methodology

RSU Vesting Value Calculator methodology

Make four RSU vesting tranches and their user-entered uncertainty explicit.
Duc Nguyen X.By Duc Nguyen X.ยท Founder, Wage101Last reviewed: View update historyMethodology

Educational only: Work and pay decision support, not tax, legal, financial or career advice.

Privacy: Calculations run locally; Wage101 does not receive your work or pay inputs.

Update policy: Reviewed when formulas or official dependencies change.

Scope: Market-neutral work and pay planning using your own assumptions.

1. Formulas and units

Probability-weighted value
totalProbabilityWeightedValue = ฮฃ trancheUnits ร— trancheSharePrice ร— trancheProbability

Where

totalProbabilityWeightedValue
Probability-weighted RSU value (currency units)Source: Calculated output
Scheduled value
totalScheduledValue = ฮฃ trancheUnits ร— trancheSharePrice

Where

totalScheduledValue
Scheduled RSU value (currency units)Source: Calculated output
Expected vested units
totalExpectedVestedUnits = ฮฃ trancheUnits ร— trancheProbability

Where

totalExpectedVestedUnits
Expected vested units (units)Source: Calculated output
Risk-adjustment gap
totalRiskAdjustmentGap = totalScheduledValue โˆ’ totalProbabilityWeightedValue

Where

totalProbabilityWeightedValue
Probability-weighted RSU value (currency units)Source: Calculated output
totalScheduledValue
Scheduled RSU value (currency units)Source: Calculated output
totalRiskAdjustmentGap
Risk-adjustment gap (currency units)Source: Calculated output

Money inputs and outputs use the currency selected in the scenario without changing the canonical methodology. Pay, time, benefits and work-related costs use the units stated beside each input.

2. Worked example

Input assumptions

Value four 250-unit annual tranches at entered prices and declining vesting probabilities.

Calculation and outputs

Example

Value four 250-unit annual tranches at entered prices and declining vesting probabilities.

Probability-weighted RSU value
19,300.00 currency units
Scheduled RSU value
23,000.00 currency units
Expected vested units
850
Risk-adjustment gap
3,700.00 currency units

Scheduled value, expected units and probability-weighted value remain separate.

Interpretation

Treat probability-weighted value as an assumption-led scenario, not guaranteed equity.

3. Validation and boundary checks

  • Exactly four explicit tranches are evaluated.
  • Each vesting year is a whole number from 1 to 20.
  • Each probability stays between 0 and 1.

4. Assumptions and source classification

  • Share prices and vesting probabilities are user assumptions.
  • Each tranche is valued independently.
  • All four entered tranches remain in the scenario URL and saved state.

This calculator has no current policy-data dependency. Its work and pay assumptions are user supplied. Registered family-level regression suites exercise the shared work-logic engine and worked-result reconciliation.

5. Limitations

  • No share-price forecast, tax, liquidity or plan rule is applied.
  • Four fixed tranches do not model every vesting schedule.
  • Probability-weighted value is not guaranteed value.

This is educational decision support, not personalised tax, legal, financial or career advice. Check the treatment of your circumstances under the rules that apply to you and seek qualified advice where appropriate.

6. Update and evidence policy

Registered family-level suites test formula invariants and example reconciliation; the release ledger records that coverage without claiming a separate oracle for every line of public copy. There is no official threshold or benchmark to refresh for this calculator. Work and pay inputs remain user-supplied because they vary by person, job and contract.

Change history

  1. : Initial public release of the RSU Vesting Value planner and methodology.

Related reading

Use these practical guides to interpret the decision and its assumptions.

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