Overview
What is it:
A vesting schedule is the specific timeline and structure that governs when tranches (or portions of an award) vest. A vesting schedule can take many forms, varying in length (commonly one to six years) and following one of two structures: cliff vesting, where the entire award, or a tranche of it, vests all at once on a single date, or graded vesting (also called ratable vesting), where the award vests in stages across the schedule, either in uniform (equal) increments or non-uniform (front-loaded or back-loaded) ones.
Why does it matter:
The schedule, not the total grant size, determines what you actually have at any moment in time, so understanding it lets you calculate what you'd forfeit by leaving on a given date instead of guessing from the headline grant value.
What do people most often get wrong:
People often read only the total grant value in an offer letter and skip the schedule attached to it. Two offers with identical total equity value can produce very different outcomes depending on how front-loaded or back-loaded the vesting schedule is.