Article · 20 min read

Vesting and Cliffs (The Holloway Guide to Equity Compensation)

Andy Rachleff, Joshua Levy, and contributors · Holloway Free Intermediate

Before you let unvested RSUs decide your life, you need to actually understand what you are walking away from, and this is the clearest breakdown of cliffs, vesting schedules, and the 90-day post-termination exercise window that quietly makes vested options worthless if you cannot exercise. It also arms you with the one move most people miss: many companies switch to monthly vesting after the one-year cliff, so shifting your last day by a few days can bank another tranche, and early vesting is negotiable if you have added real value. Use it to price the next cliff honestly, then decide, instead of postponing forever.

• A cliff is binary: leave one day before it and you get zero, so know your exact dates
• After the cliff most vesting is monthly, so your departure date is a lever worth timing to the day
• The 90-day exercise window and its cost can trap you more than the unvested shares themselves, so plan the cash before you quit