Vesting Schedule Rounding Logic - Round Up
What's new?
Company Administrators can now determine the rounding logic to be applied to the vesting breakdown when creating vesting schedule records.
How does it work?
When creating a new vesting schedule, administrators will be presented with a new setting - ‘Tranche Rounding’ with two options available - ‘Round Down’(default) and ‘Round Up’
If ‘Round Up' is selected, when the total number of shares granted is not evenly divisible by the number of tranches in the vesting schedule applied, the residual value will be rounded up to the earlier tranches in the vesting breakdown, giving more value to the recipient earlier in the service period.
If no action is taken, the vesting schedule when published will round the tranche distribution based on the default ‘Round Down’ logic, giving the greater value to the later tranches in the vesting breakdown.
Why is it important and how am I affected?
This setting gives administrators greater flexibility when creating vesting schedules to ensure the vesting breakdown applied distributes the shares as expected based on the grant/plan rules.
All newly added vesting schedules, following this release, will include the ‘Tranche Rounding’ setting which administrators can select prior to publishing. Vesting schedules using this setting can be applied to grant, transaction and warrant records.
If a vesting schedule has a status of ‘Not in Use’, administrators can edit the previously published vesting schedule to change the ‘Tranche Rounding’ setting. This setting cannot be changed for any vesting schedule with a status of ‘In Use’