A 38-year-old product manager at a London tech firm checks his portfolio and feels good about it: £420,000 in investable assets, a workplace pension stuffed with global index trackers, a Stocks & Shares ISA, the lot. Except £310,000 of that figure sits in a single stock — his own employer's — and he never actually decided to own that much of it. It just accumulated, four years of quarterly RSU vests that nobody told him to sell, sitting in a brokerage account he mostly ignores because the share price keeps climbing.
That's the trap. Restricted stock units feel like a bonus, not an investment decision, so they never get scrutinised the way a deliberate stock purchase would. You wouldn't put 70% of your net worth into one company on purpose. Yet thousands of men working for Amazon, Google, Meta, Microsoft and Netflix in the UK are doing exactly that by default, one vesting date at a time.
The double bet nobody talks about
Holding a large chunk of your employer's stock isn't just a concentrated equity position — it's a second bet layered directly on top of your salary, your bonus, and your pension contributions, all of which already depend on that same company doing well. If the business has a bad year, you don't just take a hit on your investments; you're also the one most likely to face a hiring freeze, a stalled promotion, or a redundancy round. Enron employees learned this the hard way in 2001, when many had over half their 401(k) savings in company stock that went to zero in the same year they lost their jobs. Lehman Brothers staff had a similar experience in 2008, watching their SAYE share schemes go from a nice bonus to a worthless line item in the same fortnight they cleared their desks. Northern Rock's UK employees lived through a smaller version of the same story that year, holding shares through the very workplace scheme designed to reward loyalty, right up until the bank was nationalised. You don't need a bankruptcy to get burned, either — Meta's share price fell 64% in 2022, and plenty of employees who'd been quietly accumulating RSUs since the 2018 IPO watched years of paper wealth evaporate in twelve months, right as tech hiring froze across the industry.
This is what financial planners call correlated risk, and it's the single biggest blind spot in tech and finance compensation packages. Your income, your bonus, your equity, and often your professional network are all tied to one employer's fortunes. Diversifying away from that isn't pessimism about your own company — it's just refusing to let one outcome decide your entire financial future.
The 10% rule
Most wealth managers who work with concentrated stock positions use a rough ceiling: no single stock should exceed 10% of your investable net worth, employer or otherwise. Go over that and you're no longer investing — you're speculating with a side helping of career risk attached. This isn't an arbitrary number pulled from a textbook; it's the point at which a single company's bad quarter can meaningfully dent your retirement timeline rather than just annoy you at the pub.
How the number gets built without you noticing
RSUs vest on autopilot — quarterly, usually, sometimes monthly — and the default setting on most employee stock platforms is simply "keep everything." Nobody sends you a prompt asking whether you actually want to add another £8,000 of your employer's stock to a position that's already six figures. The shares land, HMRC takes its slice as income tax and National Insurance at vesting, and the rest just sits there compounding your existing overexposure. Four years into a job with steady grants, it's entirely normal to look up and find 40%, 50%, even 70% of your net worth concentrated in one ticker — not because you chose it, but because you never chose to stop it.
Tax-aware selling — why "just sell it all" isn't free either
Selling down a concentrated position isn't as simple as clicking sell on everything above your 10% threshold. Once RSUs vest, the value at vesting is already taxed as income — that part's unavoidable — but any gain after vesting is subject to capital gains tax when you sell. Since the Autumn Budget 2024, higher-rate taxpayers pay 24% CGT on share gains above the annual exempt amount, which was cut to just £3,000 from April 2024. That allowance disappears fast if you're sitting on a large unrealised gain and try to unwind the whole position in one tax year.
Sell it all in December to "get it over with" and you could easily push tens of thousands of pounds of gains into a single tax year, paying nearly a quarter of it straight to HMRC when spreading the sale across two or three tax years would have kept more of it in your pocket. Split the same £30,000 gain across two April-to-April tax years instead, and you use two lots of the £3,000 exempt amount and two lots of your basic-rate band before the 24% rate even applies to most of it. Use your Bed and ISA allowance every year — up to £20,000 into a Stocks & Shares ISA — to shift shares out of the taxable account and into a wrapper where future growth is tax-free. A married man can double that by running the same process through a spouse's ISA allowance, provided the shares are transferred to them first at no CGT cost — HMRC treats transfers between spouses as CGT-free, which is the one part of this system that actually works in your favour. Stack that with the annual pension contribution allowance and a large concentrated position can be unwound over three or four tax years without ever paying the top CGT rate on the bulk of it. It's slower than selling everything at once, but it's the difference between funding your own diversification and funding the Treasury's.
The vesting-day auto-sell rule
Here's the single most effective habit for anyone on an RSU-heavy pay package: sell a fixed percentage of every vest, on the vesting day, automatically, regardless of what the stock is doing that week. Most brokerage platforms let you set this up once and forget it. Pick a number — 50%, 75%, even 100% if your position is already well over the 10% ceiling — and let the sale execute without you making a fresh decision every quarter.
The reason this works is psychological, not financial. Left to a discretionary decision, most people hold when the stock is up (why sell a winner?) and hold when it's down (why lock in a loss?) — which means they never actually sell. An automatic rule removes the temptation to time it, and it stops you from anchoring your identity to the share price the way people who day-trade their own company stock inevitably do. Reinvest the proceeds into a globally diversified index fund inside your ISA or pension, and you've turned a concentrated bet into an actual portfolio.
None of this means never holding company stock. If you genuinely believe in the business, have inside knowledge of its trajectory that the market hasn't priced in yet, or you're an early employee with founder-level equity and founder-level conviction, holding a larger position can make sense — that's a different calculation from an employee who's simply never sold because selling felt like betting against the team. The distinction is whether you're making an active, sized bet you'd defend to a stranger, or whether the position just grew because nobody stopped it.
A simple plan that actually gets used
Start by pulling up your total investable net worth and working out what percentage sits in your employer's stock today — most people are shocked by the real number once pension, ISA, and taxable holdings are all added up. Set the 10% ceiling as your target, not an ideal to circle back to eventually. Then build the mechanics: an automatic partial sale on every vesting date, a Bed and ISA transfer scheduled every April, and a spreadsheet that tracks your concentration percentage quarterly so it never quietly climbs back up.
The product manager from the opening eventually got there — not by selling everything in a panic after a bad earnings call, but by setting a 60% auto-sell on every future vest and moving £20,000 a year into his ISA until the position settled under 15%, then under 10%. It took two years. His employer's stock is still up since he started. He just doesn't need it to be, and that's the entire point of not betting your career and your capital on the same outcome twice.