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HR_ECM_00_LT_008 - Define Vesting Schedules

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In this step, you determine when employees can exercise their options and to what extent.

• Graduated vesting
  Graduated vesting is a form of vesting that implies that employees are allowed to buy their stocks gradually on a year-to-year basis, for example, 20% in year 1, 40% in year 2, and the final 40% in year 3.

• Cliff vesting
  Cliff vesting implies that for example 0% of the awards vest on the grant date and 100 % after two years of service.

You must have performed the activity Define Vesting Rules.

The SAP System is shipped with a set of predefined vesting schedules that you can change to meet your company-specific requirements.

Determine the vesting schedules that are required in your organization.

1. Select the relevant vesting rule.
2. Click New entries.
3. Enter a period expressed in months. The period is incremental and is processed as of the grant date.
4. Enter a percentage. The percentage is incremental and you must make sure that the sum of all percentages does not exceed 100 %.
5. Repeat the steps 3 and 4 for each period.
6. Save your entries.

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