Glossary - Accelerated Vesting

A form of vesting that takes place at a faster rate than the initial vesting schedule in a company's stock option plan. This allows the option holder to receive the monetary benefit from the option much sooner.

Some employees negotiate vesting acceleration in the event of an acquisition. For example, the employee might earn an extra six or 12 months of vesting at the close of the deal. The logic behind this benefit is the employee didn’t sign up to work for the acquirer, so they should be compensated for having to accept a significant change in environment. Acceleration upon merger is typically only offered with what is known as a double trigger. This means that two events are required to trigger the acceleration: acquisition and a change of role post acquisition (i.e. you have a lesser job).

Most companies don’t like to offer acceleration of vesting upon acquisition to anyone other than executives. The reason executives are able to command the acceleration benefit is because ironically they are the ones most likely to lose their job in an acquisition.