Double Trigger RSUs and Zakat

As-Salaam-Alaikum,

I’ve recently accepted some RSUs from my employer which will be vested over 4 years.

The employer is a private company and the RSUs that have been offered are Double Trigger RSUs which means that not only do these RSUs have to vested but the employer also has to go through a Sale Event or an IPO (this may never happen before the RSUs expire).

So one can’t even sell any vested RSUs at any given time if they wished, both conditions must be met.

The online platform used to manage these RSUs has a FMV for a single share of my employer. From my understanding once these RSUs are vested they are assigned this value. See this.

I think one of the problems with holding these RSUs once vested is that you cannot easily liquidate them. So for example if the RSUs all together were worth 10 million dollars (crazy example) but your other liquid savings are significantly less then how can you afford to pay Zakat on the RSUs?

Does one have to pay Zakat on this type of RSUs?

Unfortunately I’ve not been able to find info on Zakat and Double Trigger RSUs, all current research on the internet refers to normal RSUs which you can sell immediately upon investing which is why I think scholars come to the correct conclusion that standard RSUs are Zakatable.

It seems for me that maybe someone shouldn’t own these RSUs if the FMV is so high and they’ve vested them but don’t have enough liquid assets to cover the Zakatable asset costs of the vested RSUs.

Does anyone know any scholars with enough knowledge of Western Finance to give a ruling on whether one pays Zakat on Double Trigger RSUs from a private company before both events are satisfied?

Thanks

Spoke to Joe Bradford about this

Wa alaikum Salam, I was able to read it. I would treat these like illiquid assets. So while they hold value they cannot be liquidated due to contract or regulatory restrictions, so they are missing a condition for Zakat liability, that one is able to benefit from them. In this case, you won’t pay Zakat on them until both triggers are met, and when you receive the funds pay 2.5% on the total amount received. And Allah knows best.
https://archive.ph/mpOxZ#selection-1073.0-1092.0

I’d still recommend documenting how much Zakat you would pay on your Double Vested RSUs in case this opinion is wrong, that way you have easy numbers to refer back to if a ruling is ever issued opposite of this.

@Mufti_Billal @Mufti_Faraz_Adam Salaam,

I’d like to hear your opinions on this if possible as well.

How is this different to a situation where you have a pension and pay zakat on the pension?