vesting schedule

Definition

The timeline over which stock options or retirement benefits become owned by the employee, ensuring they can't grab equity and immediately quit. It's the corporate version of 'you have to stay for dessert if you want dessert.'

Example Usage

My stock options vest over four years with a one-year cliff, meaning I get nothing if I leave before twelve months but then get 25% all at once.

Origin

Employee benefits and compensation terminology from mid-20th century

Fun Fact

The standard Silicon Valley vesting schedule is four years with a one-year cliff, which has survived despite everyone agreeing it's arbitrary—tradition is powerful.

Source: Compensation and benefits terminology

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