Recent Examples of vesting from the Web
According to Morosi, the deal is guaranteed for $6.5 million the first year and features a vesting option for the second that along with escalators could make the deal $16.5 million for two years.
The contract reportedly includes a third-year vesting option worth $8 million.
So, too, does Boston’s likely desire to limit his playing time given a $22 million vesting option for 2019 that’s based on his number of plate appearances.
The firm prefers that companies dole out tokens over time, mimicking vesting periods in equity deals for startups.
Last year, his taxable income – enriched by the vesting of a $1.8 million annuity plus $1.6 million from the university to pay his taxes on it – totaled $5.3 million.
With a $22 million vesting option for 2020, Verlander has up to $78 million remaining on his contract after this season and full no-trade protection, which made a deal burdensome.
The PSCA says only about 39% of plans offer immediate, full vesting of matching contributions.
A short vesting schedule allows your money more time to grow, and fewer penalties for leaving your job.
These example sentences are selected automatically from various online news sources to reflect current usage of the word 'vesting.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
First Known Use of vesting
Financial Definition of VESTING
What It Is
Vesting occurs when a financial instrument or account becomes wholly owned by an investor.
How It Works
For example, let's assume that John Doe receives options to buy 2,000 shares of Company XYZ, his employer, for $10 a share. He receives the options as part of his compensation package.
His shares vest over a five-year period, meaning they do not become exercisable for five years. This means John must stay at the company for at least five years before he can exercise his stock options.
Vesting is also common in retirement plans. For example, if John Doe's employer matches the contributions he makes to his retirement plan, those contributions might vest over, say, three years. This means that although the employer agrees to add extra, free money to John's retirement account, that free money doesn't really become his for three years.
Accelerated vesting occurs when a stock option becomes exercisable earlier than originally scheduled. So if Company ABC comes along and buys a 51% stake in Company XYZ, this constitutes a change in control and John Doe's options might automatically vest even though the five-year period has not elapsed. John exercises his options at $10 a share, sells the shares for $20 a share, and walks away with a tidy profit.
Why It Matters
Vesting is a tactic for encouraging loyalty among employees. Vesting can be a windfall to employees, though some tax consequences may exist. Depending on the type of option, for example, John Doe might need to pay taxes on the grant value of the shares ($10) as well as the capital gains on the profit from the sale of those shares.
Seen and Heard
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