Overview
What is it
Vesting is the event in which an equity or benefit award moves from a conditional promise to something you actually own, free of any additional requirement (continued employment, performance conditions, or change of control/acceleration events). A single grant may include several separate vesting events, one for each tranche (or portion of an award), spread across a vesting schedule.
Why does it matter
Each vesting event determines when that tranche becomes yours, when it becomes taxable income, and when it's no longer at risk of forfeiture. It's what converts granted compensation into realized compensation, tranche by tranche.
What do people most often get wrong
People often assume vesting and receiving happen at the same moment for every instrument. For RSUs, vesting and share delivery typically happen together. For deferred compensation, vesting and distribution are often years apart. The word means "no longer forfeitable," not "in your account."