ESOP Vesting Schedules: A Key Component of Employee Ownership Plans

ESOP vesting schedules determine when employees can claim ownership of shares allocated to their accounts. The 2 main types are Cliff Vesting (100% vesting after a set period) and graded vesting (gradual vesting over time). Vesting schedules are very important for aligning the interests of an employee and employer, but at the same time, they can impact employees' financial situations.