Holicent
VIP Contributor
Accelerated vesting is a form of equity compensation that allows employees to receive stock options or restricted stock units (RSUs) earlier than what would be the case if the plan had not accelerated vesting. Accelerated vesting generally occurs when an employee’s employment with the company ends in certain circumstances. This can include laying off an employee or terminating an employee for cause; termination by mutual agreement; retirement; death; disability, etc. In these cases, instead of having the right to receive their vested options or RSUs immediately upon termination, the employee may be required to continue working for a specified period of time before being able to exercise those rights.
The effect of accelerated vesting on stock is that it reduces the number of shares withheld from option grants by lowering the number of shares eligible for vesting and increasing the number of shares available for future grants. The amount withheld decreases as soon as an option becomes vested and increases when an option becomes unvested because a greater number of shares are eligible for vesting in each year.
The effect of accelerated vesting on stock is that it reduces the number of shares withheld from option grants by lowering the number of shares eligible for vesting and increasing the number of shares available for future grants. The amount withheld decreases as soon as an option becomes vested and increases when an option becomes unvested because a greater number of shares are eligible for vesting in each year.
