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It means that one does not get to completely own the shares until specific requirements (such as length of employment) are met. The shares may also be divided into percentage over a period of time before you can obtain the full 100% shares. For example, 50% for 1st year and the remaining 50% on second year to get a full 100%. Another example is one can own 100% of the shares after two years of employment. If one quits within the first two years, then he or she can only own 50%, and the other 50% is owned by the employer.

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17y ago

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We could describe them as provisional; you can give someone shares but reserve the right to take them away again. Whereas, vested shares belong to someone fully, and cannot be taken away.


What does the vest term mean?

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