Intro
Vesting is when a stakeholder must be employed by or otherwise connected to a company before the entitlement lapses when grants and shares can be exercised. Performance-based vesting is when grants or shares vest when the stakeholder completes defined milestones.
Create your performance-based vesting conditions in a central hub and add them to the vesting schemes in your transactions, e.g. your equity plans. If the conditions are met, you can mark them centrally as achieved, and these conditions will also be marked as fulfilled in all connected transactions. This saves you a lot of administration time.
Creating a performance condition
Go to Equity Plans > Vesting > Create new condition.
Define the performance condition settings.
Name
Type
Event-based: Used for trigger events like mergers, product launches or IPOs.
Non-market performance: Based on internal metrics like revenue or EBIT margin.
Market performance: Tied to stock or market metrics like Total Shareholder Return.
(Option) Start measurement date: The date on which performance tracking begins for the specified condition. Select the date to establish the beginning of the measurement period.
(Option) Target evaluation date: The established date for evaluating the condition, used as a provisional vesting date in financial reporting and can optionally be displayed to stakeholders in the vesting breakdown.
Display target date to stakeholders: Select 'Yes' to display the target date in the vesting breakdown for stakeholders to provide a clear timeline. If 'No' is selected, this date remains internal.
(Optional) Condition details: Enter details you want stakeholders to see in a tooltip on their dashboard. This could include key terms, condition specifics, or other relevant information.
Click on Create to save the performance condition.
Publish the performance conditions to make it available for your transactions.
Editing performance conditions
By clicking on the three dots, you can edit, duplicate and delete your performance conditions.
Apply performance conditions to equity plans
Go to Equity Plans > Pools & Plans > Add or edit plan > Add vesting condition in the Vesting section.
You can add a single vesting condition (a) or multiple vesting conditions (b).
Select Performance condition to add a single vesting performance condition.
In the drop-down menu, you will find all your performance conditions
Select Performance milestones to add multiple vesting performance conditions.
Choose the performance conditions in the drop-down menus and define the weight.
Click Save.
Each time you award grants from this plan, the grants will inherit the vesting performance conditions.
Note: In the same way, you can also add performance conditions to individual grants.
Apply performance conditions to transactions
Go to Ownership > Transactions > Add or edit transactions > Add vesting condition in the Vesting section.
You can add a single vesting condition (a) or multiple vesting conditions (b).
Select Performance condition to add a single vesting performance condition.
In the drop-down menu, you will find all your performance conditions
Select Performance milestones to add multiple vesting performance conditions.
Choose the performance conditions in the drop-down menus and define the weight.
Click Save.
Evaluate performance conditions
Go to Equity Plans > Vesting > Click the three dots from a performance condition > Evaluate.
Choose the status of the performance condition:
In progress: This is the default status.
Achieved
Achieved date: Acts as the final vesting date if no other vesting conditions are pending; otherwise, marks the actual evaluation date
(Optional) Condition details: Enter details you want stakeholders to see in a tooltip on their dashboard. This could include key terms, condition specifics, or other relevant information.
Unachieved
(Optional) Condition details: Enter details you want stakeholders to see in a tooltip on their dashboard. This could include key terms, condition specifics, or other relevant information.
Click Evaluate to save the changes.
Publish the changes to apply the achievement to all connected transactions and to inform your stakeholders.
Filter your transactions by performance conditions
You are able to filter your transaction by given performance conditions.
Go to Ownership > Transactions > Filter by Performance Condition: Name.
FAQs
Which access rights are required to manage performance conditions?
All collaborators who can manage Equity Plans can also manage vesting performance conditions.