Definition
Vesting acceleration refers to the process by which an employee�s unvested equity, such as stock options, becomes fully vested earlier than originally planned, often triggered by specific events like company acquisition or mergers.
Related Services
Equity compensation services, employee benefits management, and legal services help businesses structure vesting acceleration clauses in compensation agreements. These services ensure that companies are compliant with regulatory requirements.
Problem and Application
Vesting acceleration is often used to retain key employees during transitions such as mergers and acquisitions. However, it needs to be carefully managed to avoid unwanted financial or legal complications.
Conclusion
Vesting acceleration can be a powerful tool for employee retention, particularly during acquisitions. Proper planning ensures that it is applied fairly and within the parameters of the company�s compensation strategy.
