Your offer letter says you'll get 10,000 shares "vesting over 4 years with a 1-year cliff." That sentence is doing a lot of work, and most of it isn't obvious until the dates start mattering.
The core idea
Vesting is the process of earning the equity you were promised. You don't actually own the shares on day one — they're a future promise that converts to ownership on a schedule.
A cliff is a date before which you get nothing. The most common pattern is a 1-year cliff: leave on day 364 and you walk away with zero shares. Stay through day 365 and you immediately vest 25% of the grant (1 year out of 4).
After the cliff, shares typically vest monthly or quarterly until the full grant is delivered — usually over a total of 4 years.
Why the cliff exists
Cliffs protect the company from someone joining, getting a grant, and leaving within a few months. They also give the company a clean "did this hire work out" decision point at the one-year mark.
For you, the cliff creates a real financial cost to leaving early — and a real reason to negotiate your start date carefully if you're between offers.
When the cliff matters most
- You're considering leaving within 12 months of starting. Wait past the cliff if you can; the difference is often tens of thousands of dollars.
- You're being recruited away. The new offer should ideally include a sign-on bonus or accelerated grant that compensates for the unvested equity you're leaving behind.
- The company gets acquired before your cliff. Acquisition terms sometimes accelerate vesting — sometimes they don't. See our guide on acquisitions and equity for details.
When the cliff matters less
- You're well past it (year 2+) and shares are vesting monthly.
- The equity is a small share of your total comp and the new opportunity is materially better.
- The company's outlook has changed and the unvested shares are unlikely to be worth much.
What to ask HR or your recruiter
- What is my exact cliff date, and is it calendar-based or based on hours worked?
- Does the grant have double-trigger acceleration in the event of acquisition? (See acquisition guide.)
- If I'm laid off before the cliff, do I get any pro-rated vesting?
- Is there a refresh grant schedule after the initial 4 years?
The SEC has a plain-language overview of equity compensation basics — SEC investor education on employee stock options (affiliate link — OffbookHR may earn a commission if you buy through this link. It does not affect ranking.).
This page reflects general information and is not tax or legal advice. Consult a licensed financial advisor or employment attorney for guidance specific to your situation.