Anduril Just Converted Your RSUs to Single-Trigger. Here’s the Tax Bill Nobody Mentioned.

What Actually Changed

Anduril converted double-trigger RSUs to single-trigger and is settling a tranche early. Read that slowly, because the structure is the whole story.

Double-trigger RSUs require two things to happen before you owe tax: the shares have to vest on a service schedule, and a liquidity event (an IPO or acquisition) has to occur. Until both triggers fire, you hold a promise, not income. No tax. No decision.

Single-trigger removes the second condition. Now the shares are taxed when they vest and settle, on continued service alone. The liquidity-event restriction is being waived. The company has determined a fair market value of $61.55 per share, and the value of the shares issued to you is ordinary income on your 2026 W-2.

That is the trigger. Everything below is what to do about it.

First, the Question Nobody Else Asks: How Bullish Are You?

Most advice you will hear about a concentrated equity position starts and ends with a rule of thumb. Any single stock over 10 to 15 percent of your net worth is too much risk, the thinking goes, so sell down to the line and diversify.

We do not start there. Our first question is almost always: how bullish are you on Anduril?

That question comes first for a reason. Across the pre-IPO shareholders we work with at SpaceX, Anthropic, and Anduril, the ones who built real wealth were frequently the ones who held conviction through the uncertainty, not the ones who reflexively sold down to a textbook percentage. Outsized reward requires outsized risk. If you are bullish, if you can tolerate radical uncertainty, and if you are willing to take the shot, then concentration is not a mistake. It is a choice. A deliberate bet for an outsized gain.

The generic rule-of-thumb advice treats every concentrated position the same. It cannot tell the difference between a shareholder who has no view and got lucky, and a shareholder with deep conviction in a company that just doubled its valuation in a year. Those are not the same person, and they should not get the same plan.

Here is the discipline that makes this stance work rather than reckless. Taking outsized risk is only intelligent when the downside is survivable. That means the tax is covered, your near-term living expenses are funded, and a forced sale at the wrong moment is off the table. A bullish shareholder who cannot pay April’s tax bill without dumping shares is not actually making a bet. They are exposed. The job is to fund the survivability, then let conviction size the position.

So before the rule of thumb tells you to sell, answer the real question. If your conviction is high and your downside is covered, holding is a position, not a failure to plan. If your conviction is low, or your survivability is not funded, that changes the answer. Either way, the bet is yours to make on purpose.

The Withholding Election: The Decision Behind the Decision

When your RSUs settle, Anduril (through Morgan Stanley at Shareworks) will ask you how to handle tax withholding. You will likely see an election between standard supplemental withholding and a higher rate. This is the single most consequential checkbox you will click this year.

Here is why it matters.

The federal supplemental withholding rate is 22% on the first $1 million of supplemental wages in a calendar year, and 37% on anything above $1 million. Twenty-two percent feels like a lot when you watch the shares disappear to cover it. It is almost certainly not enough.

A senior engineer in California earning a strong base salary, stacking an RSU settlement on top, is frequently in a combined marginal position of 45% to 52% once you add federal, California state tax, Medicare, and the Net Investment Income Tax. If the company withholds at 22% and your real rate is closer to 50%, the difference is not forgiven. It is due in April, in cash.

A concrete composite. A shareholder settles RSUs worth $800,000 at $61.55 per share. At 22% federal withholding, roughly $176,000 is withheld federally. The actual federal liability at the top of the bracket is closer to $280,000 to $296,000. Add California tax of roughly $90,000 and the Medicare and NIIT layer, and the all-in liability approaches $390,000 to $410,000. The withholding gap, the amount you personally owe next April after the company’s withholding, can run well past $150,000.

That is one tranche. If $2 million settles across the year, the gap scales with it.

If the election offers 37%, the higher rate does not change what you owe. It changes when you fund it. Electing 37% pulls more out at settlement and shrinks the April surprise. Electing 22% leaves more shares or cash in your hands now, but you have to discipline yourself to reserve the difference. Neither is automatically right. The right answer depends on your complete financial situation, your other income for the year, and whether you have the liquidity to make estimated payments without selling under pressure.

Pay With Shares, or Pay With Cash?

This is where the conviction question and the math meet.

When the settlement hits, you can usually cover the withholding two ways. Net settlement, where the company holds back shares to cover the tax. Or cash, where you pay the withholding out of pocket and keep all the shares.

If you are bullish on Anduril and you have the liquidity, paying with cash keeps every share in your name, riding to whatever the company is worth later. Anduril raised at a valuation of roughly $61 billion in its May 2026 funding round, about double its valuation a year earlier, and the founder has said publicly he would take the company public. For a high-conviction shareholder with the reserves to cover the tax, surrendering shares at $61.55 to the IRS is the expensive path.

But here is the trap, and it is the reason survivability has to come first. If you have no cash reserve and no asset base to borrow against, your only source of tax money is the stock itself. So you sell, or you net-settle, at $61.55. Not because you decided the timing was right. Because you had no other liquidity. That is a forced sale, and a forced sale is the opposite of a deliberate bet. You wanted to hold with conviction, and the tax bill made you a seller at the bottom anyway.

That is the difference between net worth and accessible liquidity. Your balance sheet can show millions in Anduril stock while your cash flow cannot produce the tax payment without selling the very asset you believe in.

The lesson is not “always hold” and it is not “always sell.” It is this: fund the survivability first, then let your conviction size the position. A bullish shareholder with cash to cover the tax gets to make a real bet. A bullish shareholder without it gets forced into someone else’s.

Why Single-Trigger Changes Your Multi-Year Plan

Under double-trigger, the tax was a someday problem that arrived all at once at the IPO. Under single-trigger, it is an annual problem. Shares vest on a schedule, settle, and stack ordinary income on top of your salary every year they vest.

This is the same structure SpaceX shareholders live with, and it demands the same discipline. If you do nothing, the stacking happens to you. Base salary plus an annual vest can carry you deep into six figures of additional taxable income, year after year, much of it taxed at your highest marginal rate. Planned for, it becomes a sequence you control: projecting each year’s vest, sizing your withholding election to the real rate, staging estimated payments, and coordinating with every other equity and income event in the same tax year.

The shareholders who keep the most are not the ones who guessed the valuation right. They are the ones who treated each year’s settlement as a known event and planned the cash for it in advance.

Where the ESPP and 401(k) Fit

Anduril offers an ESPP and a 401(k) with no employer match. Both change how you should think about every dollar of liquidity.

A 401(k) with no match is still a tax-advantaged account, and the contribution still lowers your taxable income in a year when an RSU settlement is inflating it. But with no match, there is no free money pulling you in, so the decision competes directly against funding your tax reserve and building a cash account outside the plan. In a heavy settlement year, the priority order matters: cover the known tax liability first, then deploy into tax-advantaged space, then build the diversified base.

An ESPP can be one of the best returns available to you when there is a purchase discount. But notice the tension with everything above. Buying more Anduril through the ESPP deepens a concentration you may already be holding on purpose. If you are bullish and deliberately concentrated, capturing the ESPP discount and selling it can be a way to harvest the discount without adding to the bet. If you are at your conviction limit already, more Anduril through the ESPP is more of the same risk. The discount is worth capturing. Whether you hold what it buys is a conviction decision, not a default.

This is Level 2 work: eliminating cash drag, sequencing tax-advantaged accounts, and managing concentration on purpose rather than by accident.

What To Do Now

1. Answer the conviction question first. How bullish are you on Anduril, and can you tolerate the uncertainty that comes with concentration? Your honest answer drives every decision below.
2. Pull your full grant picture in one place. Every RSU tranche, every settlement date, every share count, the $61.55 FMV applied to each. If you cannot see it on one page, you cannot plan it.
3. Decide your withholding election against your real rate, not the default. Run your actual combined marginal rate for 2026 with the settlement included, then choose 22% or 37% deliberately. The default is a withholding rate, not your tax rate.
4. Fund survivability, then size the bet. Cover the tax and your near-term expenses first. Only then does holding a concentrated position become a deliberate choice instead of an exposure.
5. Decide shares versus cash before settlement, not during. If you are bullish and have liquidity, keeping shares protects future upside. If you do not have the cash, know that net-settling is a forced sale and weigh it as one.
6. Plan the stack for next year. Single-trigger means this repeats. Model the income stacking for every vesting year ahead so no settlement catches you flat.

This is the work that separates the shareholders who convert equity into sustainable wealth from the ones who either mail an extra six figures to the IRS or get forced out of a position they believed in. The rule of thumb cannot tell those stories apart. We start by asking which one is yours.

Frequently Asked Questions

What does Anduril’s single-trigger RSU conversion mean for my taxes?

It means your RSUs are now taxed when they vest and settle, on continued service alone, instead of waiting for an IPO or acquisition. Under the old double-trigger structure, no tax was due until both vesting and a liquidity event occurred. With single-trigger, the company has waived the liquidity-event condition, so the fair market value of the settled shares (determined at $61.55 per share) is ordinary income on your 2026 W-2, whether or not you sell a single share.

How much tax will I owe on my Anduril RSU settlement in California?

It depends on your total income for the year, but most Anduril shareholders in California face a real combined marginal rate of roughly 45% to 52% once you add federal tax, California state tax, Medicare, and the Net Investment Income Tax. On an $800,000 settlement, the all-in liability can approach $390,000 to $410,000. Because the company’s default withholding is often only 22% federal, the gap you personally owe the following April can run well past $150,000 in cash.

Should I elect 22% or 37% withholding on my Anduril RSUs?

Neither is automatically right. The federal supplemental withholding rate is 22% on the first $1 million and 37% above that. Electing 37% pulls more tax at settlement and shrinks your April surprise. Electing 22% leaves more cash or shares in your hands now, but you have to reserve the difference yourself. The default 22% is a withholding rate, not your actual tax rate, which is frequently closer to 50% in California. The right election depends on your complete financial situation and whether you have the liquidity to make estimated payments without selling shares under pressure.

Should I pay my RSU tax with shares or with cash?

If you are bullish on Anduril and have the liquidity, paying with cash keeps every share in your name and preserves upside if the company reprices higher or goes public. If you have no cash reserve and no asset base to borrow against, net settlement (paying with shares) becomes a forced sale at $61.55, made to satisfy a tax bill rather than because the timing is right. The discipline that resolves this: fund the tax and your near-term expenses first, then let your conviction size how much you keep.

Should I sell my Anduril shares to diversify, or hold?

The standard advice is to diversify any single position above 10% to 15% of net worth. We start with a different question: how bullish are you on Anduril? Outsized reward requires outsized risk, and for a shareholder with genuine conviction who can tolerate uncertainty, concentration can be a deliberate choice rather than a mistake. The condition is survivability. The bet is only intelligent when the tax is covered and a forced sale is off the table. If your conviction is high and your downside is funded, holding is a position. If not, that changes the answer.

Is Anduril going public?

Anduril has not announced an IPO date. The company raised at a valuation of roughly $61 billion in its May 2026 funding round, about double its valuation a year earlier, and its founder has said publicly he would take the company public. For shareholders, the planning implication is that single-trigger settlements and the associated tax are happening now, regardless of when or whether a public listing occurs.

What is the Anduril RSU fair market value?

Anduril’s Board of Directors determined a fair market value of $61.55 per share for the RSU early settlement. This is the value used to calculate your ordinary income and tax withholding on the settled shares. It is a board-determined valuation for the settlement, not a public market price.

How do the Anduril ESPP and 401(k) fit into a heavy settlement year?

In a year with a large RSU settlement, priority order matters. Cover the known tax liability first, then deploy into tax-advantaged space, then build a diversified base outside the company. The 401(k) has no employer match but still lowers taxable income in a high-income year. The ESPP can be valuable when there is a purchase discount, but buying more Anduril deepens a concentration you may already be holding on purpose, so whether you hold what the ESPP buys is a conviction decision, not a default.

One quick note. We are based in Long Beach, the same city Anduril is expanding into with its new campus. If you are local, or heading this way for work, our door is open. Some people like to talk these decisions through in person rather than over a screen, and if that is you, we are happy to sit down together. No pressure either way. It is just there if you want it.

Your Equity Built This Far. Strategy Protects What Comes Next.

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DISCLOSURE:

Augustus Wealth, LLC is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Augustus Wealth, LLC and its representatives are properly licensed or exempt from licensure. This content is for informational and educational purposes only and does not constitute personalized financial, tax, or investment advice. All examples are hypothetical. Equity compensation strategies involve risks and should be evaluated in the context of your complete financial situation. Concentrated positions carry significant risk, including the risk of substantial loss, and a concentrated position is not suitable for every shareholder. Tax laws change frequently. Consult your tax professional for advice specific to your situation. Anduril is referenced for educational purposes only. Augustus Wealth has no affiliation with Anduril. Calculator outputs are estimates and should not be relied upon as tax or financial advice. Past performance is not indicative of future results.