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Vesting schedule

The timetable that specifies when options Vest, or become exerciseable. A typical vesting schedule is 25% per year on the anniversary of the grant date. That means that after one year up to 25% percent of the options granted may be exercised; after two years, up to 50%; after three years, up to 75%; after four years, all of the grant.

As another example, Cliff vesting describes a vesting schedule in which all options become exerciseable on a single date.

Performance-based Vesting and Reverse vesting are other examples of vesting schedules.

Steven Huddart
Smeal College of Business, Penn State University, University Park, PA 16802-3603 USA
(814) 863-0048
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was last updated on Tue, Aug 21, 2018.
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