Generally, when something that is promised is delivered, and ownership is officially granted to the recipient. For employees, shares generally vest according to a predetermined schedule. Vesting means that employees only receive their equity compensation after a period of employment to ensure alignment of interest between the company and the employee. The current market standard for vesting schedules is four years with a one-year “cliff.” Typically, this means that 25% of the grant will vest after one year, and the balance will vest in equal monthly installments over the following 36 months.
Generally, when something that is promised is delivered, and ownership is officially granted to the recipient. For employees, shares generally vest according to a predetermined schedule. Vesting means that employees only receive their equity compensation after a period of employment to ensure alignment of interest between the company and the employee. The current market standard for vesting schedules is four years with a one-year “cliff.” Typically, this means that 25% of the grant will vest after one year, and the balance will vest in equal monthly installments over the following 36 months.
