Why Is 4-Year Stock Option Vesting Getting An Overhaul?

Why Is 4-Year Stock Option Vesting Getting An Overhaul?

Companies like Coinbase, Lyft and Stripe are turning over a new leaf when it comes to how they handle equity grants and vesting schedules: Instead of the standard four-year vesting equity grant for new hires, these companies are now offering one-year equity grants. What does this mean for employees and employers?

A four-year vesting schedule is no longer the right fit as flexibility becomes the norm

Tech companies and their employees today are in an environment of extreme uncertainty.

What are the pros and cons for employers?

One-year vesting gives employers the flexibility to reduce their equity dilution.

What are the pros and cons for employees?

Upsides: Employees are no longer locked in for four years at the company before they can get their full equity compensation

Source

Get in