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Front-Loaded Equity

Multi-year stock grant in which all or the majority of shares is granted in the first year. The grant aggregates into one sum all or most of the expected value of grants that will be made over, typically, the upcoming three to five years. Instead of those annual grants, one award is issued up front.

Example: Your company plans to grant you 30,000 stock options over three years. Instead of 10,000 per year, you get 20,000 in the first grant and then 5,000 a year over the next two years.

As explained by a commentary from consulting firm Semler Brossy, these grants are often designed with higher upside potential but more complex vesting conditions than standard annual grants.

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