Restricted stock

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Restricted stock is an equity instrument that is not fully transferable until certain conditions have been met. Upon satisfaction of those conditions, the stock becomes transferable by the person holding the award.

Typically the conditions are a period of time. However, those restrictions can also be some sort of performance condition.

Restricted stock is becoming a more prominent form of employee compensation, particularly to executives. It has come to prominence as stock options have fallen out of favor after the excesses of the stock market in the early 21st century.

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