RSUs emerge as key strategy for firms to boost performance

A group of professors in South Korea called on companies to broaden their use of Restricted Stock Units (RSUs) to attract top talent and encourage the workforce.

RSUs are stock-based compensation where employers promise to pay their employees a certain number of shares over time. They come with specific conditions, such as performance targets or a certain period of service.

Yang Hee-dong, professor of Management Information Systems at Ewha Womans University, highlighted the advantages of RSUs at a seminar held by the Korean Academic Society of Business Administration, a representative group of employers, which took place on Wednesday in Seoul.

He cited a study that analyzed data from 2017 to 2022 for 847 out of 901 U.S. companies that use RSUs as compensation. According to the analysis, the companies offering RSUs saw stronger performance in terms of sales, operating income, and market cap. Companies without RSUs experienced a 37.2 percent sales increase over the six years, but those with RSUs achieved sales growth of 44.6 percent in the same period.

“RSUs have become the common form of equity-based compensation in recent years,” Lee Young-dal, visiting professor at the City University of New York, said. He added that companies should use RSUs to stay competitive and innovative.