Back-loaded vesting is a vesting model where a smaller portion of the shares or options vests at the start and a larger portion towards the end. It rewards those who stay long, unlike linear vesting.
The model is common in incentive programs and set out in agreements such as a shareholders' agreement. Shares enter the share ledger only once allotted. Tracking vested and unvested holdings in the company's cap table gives a fair picture of future dilution.
Vesting is the period or conditions that must be met before someone gains full rights to shares or options.
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Linear vesting is a vesting model where equal portions vest at regular intervals over a set period.
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Milestone-based vesting means rights are earned when the company or the individual reaches set goals.
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An incentive program gives employees or key people remuneration linked to how the company develops.
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