Accelerated Vesting
Accelerated vesting allows an employee to speed up the schedule for gaining access to their equity compensation as an incentive.
What is accelerated vesting?
Accelerated vesting is a process by which an employee's stock options or restricted stock units vest (i.e. become eligible for exercise or sale) sooner than originally planned.
How does accelerated vesting work?
Accelerated vesting typically happens when certain conditions are met, such as the employee remaining with the company for a certain period of time, or the company achieving certain performance milestones. The specifics of how it works can vary depending on the company's plan and the employee's contract.
Are there any tax implications of accelerated vesting?
Yes, there may be tax implications of accelerated vesting, depending on the specific circumstances. For example, if the employee is vested earlier than expected, they may have to pay taxes on the vested shares sooner than they would have otherwise.
How is accelerated vesting typically handled in the event of a merger or acquisition?
In the event of a merger or acquisition, accelerated vesting may be triggered if the employee's stock options or restricted stock units are assumed by the acquiring company. The specifics of how it is handled will depend on the terms of the employee's contract and the specific terms of the merger or acquisition.
Can employees request accelerated vesting?
In short, yes, but, it depends on the company's policy and the specific terms of the employee's contract. Some companies may allow employees to request accelerated vesting, while others may not.
Can accelerated vesting be rescinded or cancelled by the employer?
It also depends on the company's policy and the specific terms of the employee's contract. Some companies may have the ability to rescind or cancel accelerated vesting if certain conditions are not met, while others may not.
