Why is equity vesting important for employees?

Why is equity vesting important for employees?

Equity vesting is crucial as it aligns employees' interests with the company's success, encouraging long-term commitment.

How does vesting work in stock options?

Vesting in stock options typically involves a schedule where employees earn their shares over time, often 4 years with a 1-year cliff.

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

If you leave before your shares vest, you usually forfeit any unvested shares, but you retain the vested ones.

Can you explain the difference between cliff vesting and graded vesting?

Cliff vesting means you receive all your shares at once after a set period, while graded vesting gives you a portion of shares at regular intervals.

Are there tax implications for vested shares?

Yes, vested shares can have tax implications, as you may owe taxes on the fair market value when they vest.