Stripe and Lyft Speed Up Equity Payouts to First Year

Lyft and Stripe have changed their compensation packages so employees vest their entire stock awards in one year, doing away with a long-standing Silicon Valley custom of requiring staff to stick around for four years before they have their full compensation in hand.

Stripe, an electronic payments startup that could go public as soon as this year, recently introduced a one-year vesting schedule for new hires, according to a copy of an offer letter reviewed by The Information. Publicly traded Lyft earlier this year implemented a one-year vesting schedule for existing employees after introducing the faster timeline for new hires in mid-2020, spokesperson Eric Smith said.

Tech companies are introducing accelerated schedules as they test new methods to recruit workers in a highly competitive job market and after stock market volatility made it difficult to price stock packages. Since the faster vesting schedules often go hand-in-hand with smaller equity grants each year, they can also save money for companies whose valuations are rapidly rising.