Vesting is the process by which an employee accrues non-forfeitable rights over employer-provided stock incentives or employer contributions made to the employee's qualified retirement plan account or pension plan. Vesting gives an employee rights to employer-provided assets over time, which gives the employee an incentive to perform well and remain with the company.

The vesting schedule set up by the company determines when the employee acquires full ownership of the asset. Generally, non-forfeitable rights accrue based on how long the employee has worked there.

The exact requirements for vesting are specified in the plan document, which also contains any applicable regulations. For example, an employee might receive restricted stock units as part of an annual bonus.

Accelerated Vesting of Employee Stock Options: Principles and Strategies | Publications | Morrison Foerster

To entice this valued employee to remain with the company for the next interactive stock market crash game years, the stock vests according to the following schedule: If the employee leaves the company after year three, only stock options accelerated vesting units would be vested while the other 50 are forfeited.

For some benefits, vesting is immediate.

Traditional pension plans might have a five-year cliff vesting schedule or a three- to seven-year graded vesting schedule. Dictionary Term Of The Day.

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Accelerated Vesting

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