Monday, November 8, 2010

Adobe RSRG offset

After a phone call with Adobe accounting I figured out what was going on. When my Restricted Stock Shares vested:
- Adobe listed the full value of the vested restricted shares as income on my paycheck statement.
- Adobe then paid taxes by selling some of those vested shares (so I don't end up with a tax surprise at the end of the year).
- However, if they stopped there Adobe's finance system would have generated a check for me for the balance (i.e., value of options - taxes withheld > 0). But of course that "income" is listed for tax reporting purposes only, the shares now in my control actually hold the value. So to avoid having the system create an incorrect paycheck they create an artificial "RSRG Offset" item that is listed as a deduction. The RSRG Offset is exactly the net left over after subtracting the taxes withheld from the value of the shares that vested.

In other words the formula is:
Value of options at vest - taxes withheld = RSRG offset.

3 comments:

David Carr said...

Thank you! I had the same issue trying to interpret my Adobe W2 and they are inept at answering questions. This helped a lot.

Unknown said...

Ditto

Aaron Hardy said...

Ditto