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A vest fleece is an acceleration of a company's vesting for stock options, meaning that people can turn their options into stock more quickly than they would otherwise be able to do. This is most commonly done when a company has a strategic or accounting reason for wanting to encourage employees and other holders of stock options to convert their options into shares. Such events may be reported in financial publications, especially if they are sizeable, because they can provide information about a company's economic well being and plans for the future.
Some companies offer employees benefits in the form of stock options. When a company offers stock options, this gives the employee the ability to invest in the company's stock at a fixed price at some date in the future. When employees receive options, they cannot use them right away. Instead, they must wait for a period of time to elapse. Once the options mature and are ready to be used, the employee is said to be “vested.” Vesting is done with benefits to provide an incentive for employees to stay with the company and to stagger the time when benefits actually need to be paid out.
In a vest fleece, the company moves up the date of an option's maturity. Employees may be able to exercise their options right away, or the waiting period may be significantly shortened. Companies can also decide to increase the number of stock options on offer, providing employees with the opportunity to buy more stock if they want to do so. There can be advantages for employees in moving on their stock options if the price is favorable.
In the short term, the outcome of a vest fleece is that existing shareholders have less control, because employees exercise their options and take a larger share in the company. A vest fleece can also change the way a company's books look. This may be beneficial for financing and other activities a company has in mind. Having more shares after a vest fleece can also give employees opportunities in the form of shares that can potentially be sold or held in an investment account against the time when the price rises and the stocks can be sold to create funds for retirement.
Employees offered benefits such as options may want to consult a financial advisor for assistance in deciding whether or not to exercise their options, and when. Financial advisors can also help with retirement planning and other benefits, providing employees with information that they can use to make sound choices.
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