Introduction
When employees take temporary leave from your company, you may need to pause their equity vesting schedule. Ledgy allows you to add vesting pause periods that suspend vesting during leave, then resume vesting automatically when the employee returns. This article explains how to pause vesting.
Who can pause vesting: You need to be an account admin in Ledgy to add or edit vesting pause periods for employee grants.
What is a vesting pause?
A vesting pause is a temporary suspension of an employee's vesting schedule. During the pause period, time continues to pass but no equity vests. When the pause ends, vesting resumes from where it stopped.
How it affects vesting:
The vesting schedule is extended by the length of the pause
No equity vests during the pause period
Vesting continues normally after the pause ends
The total vesting duration increases by the pause length
Example: An employee has a 4-year vesting schedule and takes a 6-month parental leave with a vesting pause. Their equity will take 4.5 years total to fully vest (4 years of active vesting + 6 months paused).
How to pause vesting
The standard method allows you to add specific pause periods to an existing grant without changing the underlying vesting structure.
Step 1: Navigate to the grant
Go to Equity Plans > Grants in your Ledgy dashboard.
Step 2: Find and open the grant
Use the search bar to find the employee whose grant you want to pause. Click on their name to see their grants, then click the three dots on the right side of the grant and select Edit.
Step 3: Access the vesting section
In the Edit modal, scroll to the Vesting section.
Step 4: Add a pause period
Click the "Add pause period" button.
Step 5: Enter pause dates
Enter the following information:
Start date - When the vesting pause begins (typically the first day of leave)
End date - When the vesting pause ends (typically the return-to-work date)
If the end date is uncertain: If you don't know exactly when the employee will return, enter an approximate end date. You can edit this later once the actual return date is confirmed.
Step 6: Save the pause period
Click Save to apply the vesting pause to the grant
Note: if you don't have an exact end date yet, it is best to add an approximate one for the time being, which can be edited later on if needed.
To illustrate this, here's a simple example of what the process would look like:
Adding multiple pause periods
You can add more than one vesting pause period if the employee takes multiple leaves. Click the "Add period" button in the bottom right corner to add additional pause periods.
Example use case: An employee takes parental leave for 4 months, returns to work for 6 months, then takes another 2-month medical leave. You would add two separate pause periods to their grant