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P
Post-Vest Holding Period

A specified length of time after share acquisition during which the company requires employees and/or executives to refrain from selling or otherwise transferring the acquired shares. Some companies apply post-vest holding periods to ensure that grant recipients follow ownership guidelines. Other companies may impose them to facilitate clawbacks or lower the corporate earnings charge. A required post-vest holding period does not delay the taxation of the grant and therefore imposes a market risk: you must pay taxes on the value of shares you cannot sell, and subsequently the stock price may decrease.

For more on mandatory post-vest holding periods, see a brief guide from Radford and a white paper from SFG Wealth Planning Services.

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