Final answer:
Vesting money refers to the process of earning the right to own or receive funds or assets over a certain period. It commonly applies to company stock options, retirement plans, and employee benefits.
Step-by-step explanation:
Vesting money refers to the process of earning the right to own or receive funds or assets over a certain period. It commonly applies to company stock options, retirement plans, and employee benefits. When an individual or employee is vested, it means they have met specific criteria, such as completing a certain number of years of service or achieving certain performance goals, and are now entitled to the full ownership or distribution of the funds or assets.
For example, in a stock option plan, an employee may be granted stock options as part of their compensation package. These options often come with a vesting period, during which the employee must continue working for the company for a predetermined amount of time. Once the vesting period is over, the employee will have the right to exercise those stock options and purchase the company's stock at a pre-determined price.
Vesting is a way for companies to incentivize employees to stay with the company and reward them for their loyalty and contribution. It can also serve as a way to align the interests of employees and shareholders, as employees who are vested in the company's stock are more likely to work towards its success.