Intro
A vesting schedule can be defined when making a grant or issuing shares. Vesting is the time a stakeholder must be employed by or otherwise connected to the company before the entitlement lapses and the grant can be exercised. The following characteristics define the vesting plan: the vesting duration, or length of the allotment agreement; the interval of how frequently shares are issued; and a vesting 'cliff', a period that must pass before any grants are issued to the stakeholder.
How do you set up a (reverse) vesting schedule?
Vesting schedule
You can set up a vesting plan in the optional setting of Equity Plan transactions such as grants and plans.
Go to Ownership > Transactions > Add transactions > Other transactions > Select "Add Plan" or "Single Grant"
Reverse vesting schedule
Reverse vesting schedules can be set up in the optional settings of stock transactions, such as share issuance and share transfers.
Go to Ownership > Transactions > Add transactions > Other transactions > Select "Issue Shares" or "Share Transfer"
The multiple (reverse) vesting types
Ledgy offers three kinds of (reverse) vesting:
Time-based (simple)
Time-based (custom)
Performance-based
Time-based (simple)
With this type, the grants or shares vest evenly over the entire length. You can make the following settings for the time (simple) type:
Rounding:
Down: Rounding down to the nearest whole option or share for any number less than 0.99. For example, 100.99 will be rounded down to 100.
Up: Rounding up to the nearest whole option or share for any number more than or equal to 0.01. For example, 100.01 will be rounded up to 101.
Nearest: Rounding up to the nearest whole option or share anything more than or equal to 0.5. For example, 100.5 will be rounded to 101, while 100.49 will be rounded to 100.
Vesting start date: This optional field allows you to define when the vesting begins.
Vesting on: You decide on which day the shares or grants should vest.
Grant date: Vesting will take place on the same day of the month as the grant date. This is the default setting.
Start date: Vesting will take place on the same day of the month as the start date.
First day of the month: Vesting will occur on the month's first day.
Last day of the month: Vesting will take place on the last day of the month.
Duration: Define the vesting runtime in months.
Vest every: This is the interval in months that specifies in what increments the grant vests.
Cliff: Define the minimum number of months a stakeholder must stay at the company before receiving the first batch of vested options.
Time-based (custom)
Modify how many per cent of the grant or shares are vesting per self-defined period. You can make the following settings for the time (custom) type:
Rounding:
Down: Rounding down to the nearest whole option or share for any number less than 0.99. For example, 100.99 will be rounded down to 100.
Up: Rounding up to the nearest whole option or share for any number more than or equal to 0.01. For example, 100.01 will be rounded up to 101.
Nearest: Rounding up to the closest whole option or share anything more than or equal to 0.5. For example, 100.5 will be rounded to 101, while 100.49 will be rounded to 100.
Vesting start date: This optional field allows you to define when the vesting begins.
Percentage: Determine what percentage of the grant amount will vest per period. The percentages of all periods must total 100%.
Duration: Define the vesting runtime in months.
Vest every: This is the interval in months that specifies in what increments the grant vests.
Performance-based
With this type, the grants or shares vest when the stakeholder completes your defined milestones. You can make the following settings for the performance vesting type:
Rounding:
Down: Rounding down to the nearest whole option or share for any number less than 0.99. For example, 100.99 will be rounded down to 100.
Up: Rounding up to the nearest whole option or share for any number more than or equal to 0.01. For example, 100.01 will be rounded up to 101.
Nearest: Rounding up to the nearest whole option or share anything more than or equal to 0.5. For example, 100.5 will be rounded to 101, while 100.49 will be rounded to 100.
Milestone name: Assign a customized milestone name.
Percentage: Determine what percentage of the grant amount will vest per milestone. The percentages of all milestones must total 100%.
Target date: Admins will receive a notification in the weekly email notification digest before this date.
Achieved: When a stakeholder reaches a milestone, mark the success by turning on the toggle. Once the milestone is marked as completed, vesting will be triggered on this date.
If you want to know how to pause a vesting schedule, please read this article.