Startup Terms Glossary
What is a Vesting Schedule?
A vesting schedule is a tool used by startups to define how long an employee must remain with the company before they are fully vested in their options. A vesting schedule also indicates in what increments that vesting increases as time goes on. Some companies grant rights to ownership on a quarterly basis, while others award additional vesting rights only yearly.
Vesting Schedule Examples
Examples of vesting schedule:
- Example 1. A startup company’s vesting schedule is compounded yearly, with a term of four full years for an employee to become fully vested. Their vesting schedule indicates that for each complete year that an employee works for the company, they are granted 25% of the value of their shares.
Here’s another web page about a vesting schedule.