What is accelerated vesting? Definition, how it works and examples
Unvested equity that vests early — the single- and double-trigger clauses, what an acquirer thinks of them, and what they are worth to a holder on a sale.
The short answer
What is accelerated vesting? It is a clause in an equity grant that makes some or all of the unvested options, RSUs or restricted shares vest earlier than the schedule says — usually when the company is acquired (a single trigger), or when it is acquired and the holder then loses their job without cause or resigns for good reason (a double trigger). At a private company, this clause decides what unvested equity is worth in a sale. Without it, a buyer can assume the grant and keep the vesting clock running — or the grant can be cancelled.
What is accelerated stock vesting, and where is it written?
Accelerated vesting meaning, in mechanical terms: a defined event moves some vesting dates to an earlier date. Three documents can contain the clause. The equity plan sets what happens to all grants in a change in control — assumed, converted, cashed out or accelerated. Your award agreement can add your own terms. An offer letter, employment agreement or severance plan can promise acceleration on top. When they conflict, the more specific document usually governs; read all three. Every clause answers three questions.
What is double trigger accelerated vesting, and how does it differ from single trigger?
A single trigger accelerates on the sale alone: close the deal, and the unvested equity vests. A double trigger needs two events — the sale, and then a qualifying termination within the window. If the holder keeps their job, nothing accelerates and vesting continues on the buyer’s terms. One phrase, two meanings A private-company RSU is also called “double-trigger” — but there the two triggers are time-based vesting and a liquidity event, and the point is tax timing, not severance. A grant can be double-trigger in both senses at once. The RSU sense is explained on RSU.
Accelerated vesting, worked through
An employee holds 96,000 options at a $3.00 strike, vesting over four years: a quarter at the one-year cliff, then 2,000 a month. The company is sold at month 18 for $15.00 a share. She has 36,000 vested options and 60,000 unvested; each option is worth $12.00 of spread at the deal price. The same grant is worth anything from $0 to $720,000 more at the closing, depending on one paragraph. And the double-trigger rows depend on why she leaves: let go, she keeps the whole remaining grant; resign without a good-reason event, and she keeps none of it.
Accelerated vesting and the golden-parachute rules
For officers, larger shareholders and the most highly paid employees, US tax law tests everything paid because of a change in control — severance, bonuses and accelerated vesting together. If the total reaches three times the person’s base amount — average annual compensation over the five years before the deal — it is a parachute payment. Everything above one times the base amount is then an excess parachute payment: the recipient owes a 20% excise tax on it, and the company loses its deduction for it. Accelerated vesting is not counted at its full value.
The rules acceleration runs into, as of October 2026
Common mistakes Assuming a sale vests everything Without a clause, a buyer can assume the grant and keep the schedule. Reading only the award agreement The plan and your offer letter or severance plan may say more, or less. Resigning before checking “good reason” A double trigger usually pays only if the resignation follows a defined change — pay cut, demotion, relocation — and a notice process. Missing the window A termination a month after the protection period ends accelerates nothing. Forgetting the ISO limit Acceleration can turn part of an ISO grant into NSOs.
The terms this page uses
Accelerated vesting A clause that moves unvested equity’s vesting dates earlier when a defined event happens. Single trigger Acceleration on the change in control alone. Double trigger Acceleration only if the change in control is followed by a qualifying termination within a set window. Change in control The sale or merger event defined in the plan — usually a sale of the company or most of its assets. Good reason A defined change, such as a pay cut or demotion, that lets a holder resign and be treated as terminated.
What people ask about accelerated vesting
What does accelerated vesting mean, in one sentence? It means some or all of your unvested equity vests early because a defined event happened — usually a sale of the company, or a sale followed by losing your job. Is double trigger better than single trigger for an employee? Single trigger pays more often, because it needs only the sale. Double trigger protects you only if you are let go or resign for good reason in the window. Acquirers tend to prefer double trigger, because single trigger removes the reason to stay. What happens to unvested equity in an acquisition without acceleration?
What does accelerated vesting mean, in one sentence?
It means some or all of your unvested equity vests early because a defined event happened — usually a sale of the company, or a sale followed by losing your job.
Is double trigger better than single trigger for an employee?
Single trigger pays more often, because it needs only the sale. Double trigger protects you only if you are let go or resign for good reason in the window. Acquirers tend to prefer double trigger, because single trigger removes the reason to stay.
What happens to unvested equity in an acquisition without acceleration?
The plan decides. The buyer may assume or convert the grant and keep the schedule running, cash it out, or, if the plan allows, cancel it. Accelerated vesting is what turns unvested equity into vested equity at closing.
Does accelerated vesting change the tax?
It changes the timing: vesting or settlement that would have happened over years happens at once. For executives it can also trigger the 280G excise tax, and for ISOs it can push options over the $100,000 annual limit.
Do investors in a private company care about acceleration clauses?
Yes. Acceleration shifts part of the sale price to employees, and a buyer facing single-trigger grants may pay less or require new retention grants. Investors and boards may limit single-trigger acceleration for that reason.
Where the rules on this page come from
Rules were last verified on 2 October 2026 and are US federal. The examples are illustrative. The golden-parachute rules are in 26 USC 280G and its regulations; the terms of any real grant are in its plan and agreements.