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Hybrid vesting

Hybrid vesting

Hybrid vesting is a vesting model that combines time-based conditions with milestones.

What is hybrid vesting?

Hybrid vesting (Swedish: hybridvesting) is a vesting model combining time-based and performance conditions. Part of the shares or options vests over time, as with linear vesting, while another part requires goals to be met, as with milestone-based vesting. It is common in stock option programs for key people.

 

Hybrid vesting and the ownership picture

The conditions decide when the holder receives shares or compensation. For a correct cap table, the company tracks both time and milestones and enters shares in the share ledger when they pass to the holder.

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Henrik Kristensen, NVR
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Related terms

Vesting

Vesting is the period or conditions that must be met before someone gains full rights to shares or options.

Linear vesting

Linear vesting is a vesting model where equal portions vest at regular intervals over a set period.

Milestone-based vesting

Milestone-based vesting means rights are earned when the company or the individual reaches set goals.

Stock option program

A stock option program gives, for example, employees the right to buy shares in the future.