What are the implications of equity vesting?

What are the implications of equity vesting?

Equity vesting refers to the process by which an employee earns rights to stock options or shares over time. It can impact your financial planning and tax obligations.

How does vesting affect my taxes?

Vesting can trigger tax events. For example, when your options vest, you may owe taxes on the fair market value of the shares at that time.

What happens if I leave the company before my shares vest?

If you leave before your shares vest, you typically forfeit any unvested shares. However, vested shares are usually yours to keep.

Can I negotiate my vesting schedule?

Yes, in some cases, you can negotiate your vesting schedule, especially if you have leverage during the hiring process.

What are common vesting schedules?

Common vesting schedules include a four-year vesting period with a one-year cliff, meaning you earn your shares gradually after the first year.