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As for the more frequent vesting (as opposed to the 1 year cliff): I heard companies started doing that to reduce or eventually eliminate the signing bonus. The
by aluminussoma 7y ago
As for the more frequent vesting (as opposed to the 1 year cliff): I heard companies started doing that to reduce or eventually eliminate the signing bonus. The theory being that a more frequent vesting schedule will accomplish the same thing.
For example, one recent offer from a big tech company was for a 6 month vesting schedule with no cliff. Most are switching to quarterly vesting schedules with no cliffs.
- jonluca 7y agoThat's interesting. Yeah most of my FAANG offers had no cliff (quarterly or monthly). All my unicorn offers were 1 year cliff though :/ I wonder if they'll bake the bonus in. Getting those $100k signing bonuses are pretty nice, especially since some companies give 25% or 50% before you start, which allows you to do a trip. Plus $100k added into a 4 year vesting schedule is a pretty large opportunity cost (assuming you could grow at 7% a year, which is admittedly aggressive, is leaving ~$30k on the table).
- ska 7y agoRSU vs. option is a big difference here too, you can see shifting "signing bonus" into RSU with quicker schedule, but if it's options you can't get out anyway in the short term so they really are oranges vs. apples.
- opportune 7y agoI heard it was twofold: One, monthly vesting is strictly better than less frequent vesting. So once one firm (think it was Facebook?) started offering it everyone else in the same pay scale had to, to compete. Two, the cliffs made it optimal for people to leave right afer the cliff, then take the signing bonus at another company. Removing the cliffs makes it so there is never an “optimal” time to leave