Definition of 'Fully Vested'
In the world of finance, vesting refers to the process by which an employee's stock options or other equity awards become theirs to keep. Vesting schedules typically begin on the date an employee is hired, and they may be based on a number of factors, such as the employee's length of service, performance, or company profitability.
When an employee is fully vested, they own 100% of their vested shares and can sell them or otherwise dispose of them as they see fit. However, it is important to note that vesting does not always mean that the employee has received the shares. In some cases, the shares may be held in a trust or other account until the employee meets certain conditions, such as retiring or reaching a certain age.
Fully vesting is an important milestone for employees, as it gives them greater control over their financial future. However, it is important to understand the terms of your vesting agreement before you celebrate. Some vesting schedules are more generous than others, and there may be penalties for leaving your job before your shares are fully vested.
If you are considering leaving your job, it is important to speak to your human resources department about your vesting schedule. They can help you understand your options and make the best decision for your financial situation.
Fully vesting is a complex topic, and there are many factors to consider. If you have any questions, be sure to consult with a financial advisor.
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