What are vesting schedules and how do they work?
An example of an AI chatbot conversation about vesting schedules and their mechanics.
What are vesting schedules and how do they work?
Vesting schedules determine when employees earn full rights to their benefits, like stock options or retirement funds.
Can you explain the different types of vesting schedules?
Sure! The main types are cliff vesting, graded vesting, and immediate vesting. Each has its own timeline and rules.
What is cliff vesting?
Cliff vesting means that employees must wait for a specific period before they earn any benefits, usually one year.
How does graded vesting differ from cliff vesting?
Graded vesting allows employees to earn a percentage of their benefits over time, rather than all at once after a cliff.
Why are vesting schedules important for companies?
They help retain employees by incentivizing them to stay longer, aligning their interests with the company's success.
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