For NVIDIA employees and alumni
Planning for NVIDIA employees, when the stock is most of the net worth.
NVIDIA’s insider trading policy bars the people it covers from hedging, shorting, pledging, or margining company stock, so the usual answers to a concentrated position are unavailable while you work there. We plan around what the policy allows: staged sales in open windows, 10b5-1 plans, gifts of appreciated shares, and the ESPP, with California and federal taxes modeled at each step.
The situation
A position you did not choose, and rules on how you may reduce it
NVIDIA reported about 42,000 employees in 38 countries at the end of fiscal 2026, 31,000 of them in research and development. RSUs vest over four years and are taxed as wages on each vest date whether or not you sell. Add ESPP purchases at 85% of the lower of two prices and years of appreciation, and one stock can become most of what a household owns, with a basis far below its current value.
The insider trading policy, filed with the fiscal 2026 10-K and updated in October 2025, applies to employees, directors, contractors and consultants. It prohibits any hedge of NVIDIA securities, naming equity swaps, prepaid forward sale contracts, collars and straddles, and it bars short sales, margin accounts, and pledging shares for a loan. Employees the company designates may not trade or gift shares during a closed window that begins five weeks before each fiscal quarter-end and generally reopens on the second trading day after results. Section 16 officers pre-clear every transaction. Trades under a 10b5-1 plan already in effect may run through a closed window.
So the toolkit for a current employee is short: sell on a schedule inside open windows or through a 10b5-1 plan, give appreciated shares, and decide lot by lot what the ESPP is for. Exchange funds, collars and forwards belong to a later chapter, after you leave. That short list is where the plan starts.
Hypothetical illustration
A staged sale across three tax years, in round numbers
A hypothetical household holds $2,400,000 of NVIDIA stock, 60% of a $4,000,000 net worth, with a $600,000 cost basis spread across long-term lots. New vests are sold at vest. The written rule: sell $400,000 in each open window after the first, and give a long-held lot to a donor-advised fund in the year of the largest sales. Prices and net worth are held flat for the arithmetic only; real prices move, which is why the rule is written before the window opens.
| Tax year | Open windows used | Sold | Long-term gain realized | Given to a donor-advised fund | Company stock remaining | Share of net worth |
|---|---|---|---|---|---|---|
| 2026 | 1 (late in the year) | $400,000 | $300,000 | None | $2,000,000 | 50% |
| 2027 | 2 | $800,000 | $600,000 | $100,000 lot with a $25,000 basis | $1,100,000 | 28% |
| 2028 | 2 | $800,000 | $600,000 | None | $300,000 | 8% |
Over three years the household realizes $1,500,000 of long-term gain and gives away $100,000 carrying $75,000 of gain no one pays tax on. For a California resident in the top brackets, each dollar of realized gain faces the 20% federal capital gains rate, the 3.8% net investment income tax, and California’s 12.3% rate above $742,953 of taxable income single ($1,485,906 joint, 2025 schedule), plus 1% over $1,000,000. Selling everything in 2026 would put $1,800,000 of gain into one return; spreading it uses three years of thresholds, and every sale sits in an open window.
The gift takes a fair-market-value deduction because the lot was held more than a year, within the 30%-of-adjusted-gross-income limit for appreciated stock, and a designated employee makes it in an open window: the policy’s closed-window exception covers only estate-planning transfers where you keep beneficial ownership. How much to keep at the end depends on the rest of the balance sheet, not on a view of the stock.
Why it’s complex
Five NVIDIA-specific decisions that compound
Concentration with hedging off the table
The policy bars collars, forwards, swaps, short sales, margin and pledging for everyone it covers. What remains is a written sell rule tied to open windows or a 10b5-1 plan, gifts of the lowest-basis lots, and a decision about how much the household keeps.
Equity compensation and concentrated stockRSU vests and the withholding gap
Vest value is wages, withheld federally at a flat 22% until supplemental wages pass $1,000,000 in a year, then 37%, and by California at 10.23% on stock compensation. For a household in the 32% or 35% bracket the federal shortfall runs $10,000 to $13,000 per $100,000 vested, so we size estimated payments each year.
The full RSU guideThe ESPP has a 24-month lookback
Offerings run about 24 months in four six-month purchase periods, begin in March and September, and price shares at 85% of the lower of the offering-start price or the purchase-date price. Contributions can reach 25% of earnings, within the $25,000 annual cap set by Section 423.
The full ESPP guideThe closed window and 10b5-1 plans
For designated employees the window closes five weeks before quarter-end and reopens two trading days after results, so a large part of every quarter is closed. A 10b5-1 plan adopted in an open window, after the 30-day cooling-off period SEC rules set for non-officers, can sell through it.
Executives and equity compensationLeaving California, or leaving NVIDIA
California taxes the share of each RSU vest earned by workdays in the state between grant and vest, even after you move. Unvested RSUs are forfeited when service ends. Texas has no personal income tax, and a genuine nonresident’s later gains are not California’s.
Planning in AustinSources: NVIDIA Insider Trading Policy, Exhibit 19.1 to the fiscal 2026 Form 10-K (closed window, hedging and pledging bans); NVIDIA fiscal 2026 Form 10-K (headcount, RSU vesting, ESPP terms); Amended and Restated 2012 Employee Stock Purchase Plan; IRS Publication 15 (2026). As of September 2026; your grant notices and plan documents govern.
Our approach
A plan that follows the policy calendar
We start from the public documents, then from yours: grant history, ESPP lots with purchase dates, and a record of California workdays if you have moved or might.
Map every lot
Each RSU and ESPP lot with basis and holding period, the household’s company-stock weight, and which windows are open for you.
Write the sell rule
A fixed amount or share per window, or a 10b5-1 plan with its cooling-off period, adopted while the window is open so it keeps working through closed ones.
Settle the tax
Estimated payments for the withholding gap, ESPP sales timed to qualify or, on purpose, not to, and donor-advised fund gifts of the lowest-basis lots.
Widen the toolkit
Once the policy no longer applies: an exchange fund for accredited investors, a charitable remainder trust, Roth conversions in lower-income years, and direct indexing around what stays.
The work
What you’ll work through with us
- A lot-by-lot inventory of RSU and ESPP shares with basis, holding periods, and dates
- A written sell rule matched to your open windows, or a 10b5-1 plan design
- The RSU withholding gap: federal and California estimated payments
- ESPP decisions: contribution rate, the lookback, and the tax on each sale
- Donor-advised fund gifts of appreciated shares and the deduction limits
- Concentration targets sized to the balance sheet, never to a stock forecast
- California-source income before a move, the residency file, and coordination with your CPA and estate attorney
Planning at the firm is led by Theo Halbardier, CFP®, CIMA®, CAIA®, the firm’s founder. We are fee-only: no commissions, no product sales. About Theo
Questions
Common questions from NVIDIA employees
Are you affiliated with or endorsed by NVIDIA?
No. The Financial Sciences Company is an independent, fee-only registered investment adviser, not affiliated with, endorsed by, or sponsored by NVIDIA Corporation or its stock plan administrators. We work from NVIDIA’s public SEC filings and, with your permission, your own grant notices and statements.
Can I use a collar or an exchange fund on my NVIDIA shares?
Not a collar, a prepaid forward, or a swap while the policy covers you: it prohibits every form of hedging and names those instruments. An exchange fund transfers shares into a partnership, which we treat as a post-departure tool. Even then it is limited to accredited investors or qualified purchasers, holds about a fifth of its assets outside marketable securities, generally requires seven years before leaving without reviving the gain, and charges fees throughout.
How much tax is withheld when my RSUs vest, and is it enough?
NVIDIA withholds shares at vest. Federal withholding on supplemental wages is 22% until they exceed $1,000,000 in the calendar year, then 37%; California withholds 10.23% on stock compensation, and state disability insurance takes 1.3% of every dollar with no wage cap. For a household in the 32% or 35% federal bracket and California’s 9.3% to 12.3% brackets, the shortfall on a large vest is often five or six figures, so we size estimated payments to close it.
Should I hold ESPP shares for the qualifying period?
A qualifying disposition needs two years from the offering date and one year from purchase; with a 24-month offering, the offering-date clock can run out soon after the last purchase, but each lot’s one-year clock still runs. Meet both and the ordinary income is capped at the discount measured on the offering date; sell earlier and the whole spread at purchase is wages. The plan also lets NVIDIA reset an offering when the price at the start of a purchase period is at or below your offering-date price. Holding adds to a position that may already be large, so we decide lot by lot.
I moved from Santa Clara to Texas. Does California still tax my RSUs?
Partly. Under FTB Publication 1004, California taxes the wage income from a vest in proportion to the workdays you spent in California between grant and vest; a grant earned half in Santa Clara and half in Austin is half California-source. ESPP ordinary income is sourced the same way, from grant to purchase. Once you are a genuine nonresident, the capital gain on a later sale belongs to your new state, and Texas has no personal income tax. Residency turns on closest connections, so the move needs a file behind it.
What happens to my RSUs and ESPP shares if I leave NVIDIA?
Under the RSU agreement, units not yet vested when your service ends are forfeited, except on death, where vesting accelerates as the grant notice provides. Shares you already own, including ESPP shares, stay yours; the plan’s termination rules govern unused contributions. Once the policy no longer applies to you, the closed windows and hedging limits fall away, though the law still bars trading on material nonpublic information. That is when the wider toolkit opens.
Reviewed by Theo Halbardier, CFP® · Updated September 2026 · Figures current for 2026
Bring your grant summary and ESPP purchase history.
The first conversation is 30 minutes, by video. A recent equity statement helps, but no preparation is needed.
We work with clients across California from our base in Texas, meeting by video.
Meet with usNVIDIA and its logo are trademarks of NVIDIA Corporation. The Financial Sciences Company is an independent, fee-only registered investment adviser and is not affiliated with, endorsed by, or sponsored by NVIDIA. Plan details summarized here come from public sources and may change; your plan documents govern. IMPORTANT CONSUMER INFORMATION: The Financial Sciences Company, LLC is a registered investment adviser with the Texas State Securities Board. Registration does not imply a certain level of skill or training. We may transact business in California only if we are registered there or are excluded or exempt from registration. We do not provide individualized, personalized investment advice to California residents for compensation until we have first complied with California’s requirements or confirmed that an exemption applies. We do not maintain an office in California. For information about our registration status or disciplinary history, contact your state securities regulator or visit adviserinfo.sec.gov. This page is general education, not individualized advice.