If you are looking into recording a grant whose vesting schedule is not based in time, you can create easily create a performance-based vesting schedule.
The performance-based vesting schedule allows for customization of tranches that do not fit Carta's standard time-based schedule types. For the purpose of this article, we will use an option grant as an example.
1. Navigate to Equity Awards > Options.
2. Click Issue Grant > Issue online/Register offline issuance.
3. Select an existing holder or click on Or add a new optionholder. If a new optionholder is created, it will be necessary to add optionholder details, such as name, email, stakeholder type, stakeholder category, etc.
4. Enter the details related to the option. The required details (marked with a red asterisk on the platform) will vary according to the equity type. The main field to note in this instance is Options, as the total amount of equity granted has to match the total amount of equity that vests in the performance-based vesting schedule. In this example, we are granting 40 options.
5. Under Vesting type, select Performance-based.
6. In Vesting Preview you will be able to create each tranche of your performance-based vesting schedule. If you want to add a new tranche to the vesting schedule click on Add new row.
In each tranche you will be able to input:
Date: The date in which the options is expected to be available for its grantholder.
- Vested: Use this field if any portion of the grant vests in that tranche.
- Scheduled: This field is used for the total quantity of options that may or may not vest for that specific tranche.
- Vesting conditions: The conditions that the grantholder has to meet in order for the tranche to vest.
- Market-based: Tick the box if the conditions to make the tranche vest are market-based rather than performance-based.
- Scheduled total: This is a field that will be auto-populated with the sum of the total number of options in all the tranches.
Click Publish and notify grantholder if you wish to send the grant for acceptance or Save draft if you still need to review the details of the issuance at a later time.
7. Once the grant has been published and the conditions for tranches to vest were met, vesting should be done manually in the platform.
In the Grants page click on the Action Button next to the grant > Change grant details.
8. Click Update Vesting.
9. Input the number of vested options under the column Vested for the tranche you would like to update. Click Save at the bottom to publish the update.
10. In the Grants page click on View to see the changes reflected in the vesting schedule.