What Should I Do With My RSUs When They Vest During a Commodity Cycle Peak?

What Should I Do With My RSUs When They Vest During a Commodity Cycle Peak?

If you're a mining executive or energy professional sitting on a six or seven-figure RSU position, you've likely watched your wealth soar with the commodity cycle. Copper, gold, and energy prices have been elevated for months, and your company stock has followed.

Here's the hard truth: that same cycle works in reverse, and when it does, concentrated positions amplify the damage

What should I do with my RSUs when they vest during a commodity cycle peak?

The core answer is simple: develop a plan to diversify before the downturn, not after.

When RSUs vest, you own real shares. You have choices: hold and hope, sell systematically, or use more sophisticated hedging. Yet, most executives freeze when commodity prices are high. They convince themselves "it won't happen again" or "the company is different this time." History says otherwise. Commodity cycles move, and positions that feel safe at the peak feel incredibly risky at the trough.

The timing right now (March 2026, with Q1 vesting windows open and tax season underway) is ideal for this conversation. You have visibility into your vesting schedules for the year. You can model tax consequences before they hit. Most importantly, you can execute strategies calmly instead of in a panic.

How can I actually reduce the risk of having too much company stock?

Start with a clear picture. How much of your net worth is tied to your employer? A common rule of thumb dictates that no more than 10-20% of your liquid net worth should be in a single stock, especially in a cyclical industry. Many mining and energy executives carry 40-60%. That's not aligned with how diversified investors build lasting wealth.

Here are your main options for unwinding that risk:

• Systematic selling: Sell a percentage of vested shares on a fixed schedule regardless of price. This removes emotion and timing risk.
• 10b5-1 trading plans: This pre-approved selling schedule protects officers and directors from insider trading concerns. It typically requires a 90-day cooling-off period before your first sale, making planning ahead essential.
• Collar strategies: This involves buying downside protection (a put option) while selling upside (a call option). Caution: While powerful, this is complex and requires strict compliance team review, as many companies outright prohibit executives and insiders from trading options on company stock.

What are my main options for diversifying without triggering massive taxes?

This is the real stopper for most executives. Tax anxiety paralyzes decision-making, but a common misunderstanding about how RSUs work keeps too many professionals trapped in concentrated positions. To fix this, you have to separate your strategy into two buckets: newly vesting shares and legacy shares.

1. Newly Vesting RSUs (The "Free" Diversification) When your RSUs vest in Q1, the entire fair market value is taxed as ordinary income right then and there (usually handled via share withholding on your W-2). Because you've already paid income tax on that value, your cost basis simply becomes the stock price on the day it vests.

• The Strategy: If you sell those newly vested shares immediately, you lock in the peak commodity price and trigger effectively zero capital gains tax. This is the easiest way to start diversifying your future wealth without a tax penalty.

   

2. Legacy Shares (The Capital Gains Math) The real tax anxiety comes from shares you’ve held onto from past vests that have ridden the commodity wave up. Let's look at a hypothetical $500,000 concentrated position with a $100,000 cost basis (a $400,000 long-term capital gain).

Yes, paying the tax hurts, but the math changes when you compare the tax hit to the cycle risk. A 30% decline (which is conservative, as mining stocks have fallen 40-60% in severe cycles) erases $150,000 of your wealth immediately. Conversely, paying the maximum 23.8% capital gains tax (20% bracket + 3.8% Net Investment Income Tax) on that $400,000 gain costs you roughly $95,200.

• The Hard Truth: The tax hit is a known, fixed cost to protect your wealth. A commodity downturn is an unpredictable, potentially devastating cost. Don't let the tax tail wag the wealth-management dog.

Strategies to minimize the tax hit on legacy shares:

• Stagger sales over multiple tax years: Spread your sales out to manage your exposure to the highest tax brackets and the Medicare surtax.
• Harvest losses elsewhere: Review your broader portfolio. Strategically realizing losses in other investments can offset the gains from your company stock. (Note: Watch out for the 30-day wash-sale rule).
• Charitable Gifting: Donating highly appreciated legacy shares directly to a Donor-Advised Fund (DAF) allows you to deduct the full fair market value and avoid the capital gains tax entirely.

Take Action Before the Cycle Turns

What's holding you back from developing a plan to diversify your position? Is it timing uncertainty, tax anxiety, or something else?

These are general strategies and the exact math depends on your vesting schedule, cost basis, and tax bracket. If you want to see what an immediate sell vs. hold strategy looks like for your upcoming Q1 vests, let's look at the numbers together.

Schedule a complimentary RSU Modeling Call: Link to Calendar