What are vesting schedules in equity compensation?
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What are vesting schedules in equity compensation?
Vesting schedules determine when employees earn their equity compensation, like stock options or shares.
How do these schedules typically work?
Typically, vesting schedules can be time-based, performance-based, or a combination of both, often spanning several years.
What is the difference between cliff vesting and graded vesting?
Cliff vesting means employees receive all their benefits after a set period, while graded vesting allows gradual earning over time.
Can you give me an example of a common vesting schedule?
A common example is a four-year vesting schedule with a one-year cliff, meaning no shares vest in the first year.
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