What is Performance-based vesting?
Performance-based vesting is a less common form of vesting, as opposed to the more general time-based vesting. In this case, the schedule covers the allocation of ownership depending on performance.
Example of performance-based vesting
It makes sense to offer performance-based vesting to executives who will only receive stock options if they hit targets that drive long-term value, like revenue growth. This type of vesting would be more suitable for a CMO or Head of Sales than for an Office Manager.
