cliff vesting

Definition

A vesting schedule where retirement or equity benefits become fully available all at once after a specific period, rather than gradually. You get nothing, nothing, nothing, then suddenly everything.

Example Usage

My stock options have cliff vesting at three years, so I'm white-knuckling it until my anniversary date.

Origin

Common in pension plans since the 1970s, adopted by tech companies for equity compensation in the 1980s-1990s

Fun Fact

Cliff vesting is an excellent retention tool—quit a month before the cliff date and you get zero, explaining why so many people leave on day 366 of a one-year cliff.

Source: Benefits and equity compensation terminology

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