Vesting Schedule Calculator

A vesting schedule is a clock attached to an equity grant. Nothing is owed on day one; the units are earned by staying, month by month, until the schedule runs out. The common shape is four years with a one-year cliff, and on a 10,000 unit grant that means 208.33 units a month once the clock starts counting. At 24 months the calculator returns 5,000 of 10,000, half the grant, with 24 months still to run.

The cliff is the only step in the schedule

At month 11 nothing has vested at all. At month 12 the first year arrives in one piece, 12/48 of the grant, or 2,500 units, and from there it is 208.33 a month: 2,708 at month 13, 5,000 at month 24, 7,500 at month 36. Everything after the cliff is a straight line, which is why the month entered matters far more around month 12 than anywhere else on the schedule.

The month to enter is the number of months since the vesting start date, which is not always the day employment started. Grants are often dated from a board approval that lands weeks after a joining date, and a second grant made two years in starts its own four-year clock from its own date rather than sharing the first one. Where the two differ, the grant date is the one the schedule counts from.

Vested and owned are different things

IFRS 2, the accounting standard covering share-based payment, defines a right as vested once the holder's entitlement is no longer conditional on satisfying any vesting condition. For restricted stock units that is usually the end of it and shares are delivered. For share options it is not: a vested option is a right to purchase shares at a fixed price that still has to be exercised and paid for, and option plans normally close that right a set period after employment ends, at which point vested but unexercised options lapse. The calculator counts units that have vested. It does not know whether they have been exercised, delivered or settled in cash, and it carries no share price, so the output is a unit count rather than an amount of money.

What a straight line cannot do

Straight-line vesting is an assumption, not a law. A back-loaded schedule releasing 10%, 20%, 30% and 40% across four years reaches 30% at month 24 where the straight line reaches 50%, a difference of 2,000 units on a 10,000 grant, and this calculator cannot represent it. Quarterly vesting is the same problem in miniature: where units are released every three months rather than every month, the straight line runs slightly ahead of the grant between release dates. IFRS 2 also splits vesting conditions into service conditions and performance conditions, and only the first is a clock. A grant that vests on a revenue target or a listing does not vest on time served at all.

The terms deciding all of this sit in the equity incentive plan and the individual grant agreement rather than in an offer letter, and the NVCA model legal documents are the public templates a large share of venture financings and their option plans are papered from. Acceleration is the clause that changes this arithmetic most: single-trigger acceleration vests the grant on a change of control, while double-trigger acceleration requires both the sale and the holder losing their role. Neither is in this model, which assumes the clock simply runs.