Vesting cliff

Definition

A date before which none of a grant has been earned at all.

Why It Matters

A searcher's own stake usually vests over years with a cliff at the first one, and so does the stock granted to a key manager after close. Leaving a day early means leaving with nothing, which is the whole point of the design. What matters in an acquisition this size is how it lines up with the seller's transition: when a manager's cliff falls after the seller has already gone, there is a window where the person who knows the customers has no reason yet to stay. Set it against the handover rather than the calendar.

In numbers: A four-year vest with a one-year cliff means 25% of a 10% grant, so 2.5% of the company, is the first thing anybody earns.