What is a cliff vesting schedule?
Herein, what does Cliff mean in vesting?
Cliff vesting is the process by which employees earn the right to receive full benefits from their company's qualified retirement plan account at a specified date, rather than becoming vested gradually over a period of time.
Similarly, what is a typical vesting schedule? Standard practice is to have employee stock vest proportionally over a period of four years, on a monthly basis, with a one year cliff. This means that 25% of stock vests each year for the first four years of that employees' employment at the startup, in monthly (or sometimes quarterly) increments.
Just so, what does 4 years vesting with 1 year cliff mean?
A typical options vesting package spans four years with a one year cliff. A one year cliff means that you will not get any shares vested until the first anniversary of your start date. At the one year anniversary, you will have 25% of your shares vested. After that, vesting occurs monthly.
What is a 2 year cliff vesting schedule?
That means that all employer contributions must be fully vested with employees no later than three years. A cliff vesting schedule is a way that employers can simplify their vesting. A two-year cliff vesting schedule vests employer contributions all at the end of the same year: Year 1: 0%