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Quantitative Finance · Glossary

What is Deferred compensation, vesting schedule?

Also known as: deferred compensation · vesting schedule

Definition 10.4 The Desk and the Firm · Chapter 10 — Hiring and Compensation

Deferred compensation is variable pay awarded for a year but paid in later years, in cash, shares or fund units. Its vesting schedule sets when each part becomes the employee’s: all at the end of a period (cliff) or in equal parts each year (pro rata).

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