Vesting Cliff

The period of time an employee must remain employed with a company before their employer benefit plan vesting rights are triggered in-full. Cliff vesting stands in contrast to other vesting schedules in which vesting rights are partially triggered at over time. Failure to maintain employment with the employer for less than the cliff period results in the total forfeiture of rights to all options.

 

EXAMPLE:

Husband: “I’m torn about taking this job offer. If I remain with my current employer for another 18 months, my vesting cliff will expire and my employment benefit plans will pay out in full. If I leave, we will get nothing.”

Spouse: “That is an important consideration. With that said, you are currently selling subscription razorblades online, whereas the new job offer would allow you to run an entire chain of successful restaurants. Razorblades… or restaurants. Is this really something you’re having trouble choosing between?”

Husband: “Well… I do love a close shave.”

Spouse: (Sighs.)