What is equity vesting?

What is equity vesting?

Equity vesting is the process by which an employee earns rights to stock options or shares over time.

How does the vesting schedule work?

A vesting schedule outlines when an employee will gain full ownership of their equity, often over several years.

What are the common types of vesting schedules?

Common types include cliff vesting, where all equity vests at once after a set period, and graded vesting, where it vests gradually.

What happens if I leave the company before my equity vests?

If you leave before your equity vests, you typically forfeit any unvested shares, but you keep the vested ones.

Can you explain the tax implications of equity vesting?

Sure! When your equity vests, it may be considered taxable income, and you might owe taxes based on the fair market value.