Is a 4-Year Vesting Schedule Still Standard?

It depends on whether a company is public or private. At private companies, average new hire grant durations have remained stable since 2020. At public companies, the story is different: average new hire grant durations have declined steadily from around 3.5 years in 2020 to approximately 3.0 years in Q1 2025, based on an analysis of new hire and ongoing grants in Pave's compensation database.

The same trend is visible—and even more pronounced—in ongoing grants. Public company ongoing grant durations have fallen from around 3.6 years in early 2020 to approximately 2.9 years by Q1 2025, while private company ongoing grants have drifted only modestly downward over the same period. The divergence between public and private has widened most sharply since 2022, suggesting the shift is accelerating rather than plateauing.

For public companies, the move toward shorter vesting schedules is likely driven by two related forces. First, public companies face greater scrutiny around stock-based compensation (SBC) and equity burn, which has driven more innovation in equity program design. Second, shorter grants give companies more flexibility—keeping equity burn in check while creating more opportunities to reward top performers with outsized ongoing grants over time. 

For total rewards leaders benchmarking equity, this shift has an important practical implication: comparing grant values on a total basis without accounting for vesting duration means mixing fundamentally different program designs in the same sample. The more accurate approach is to benchmark equity on an annualized basis first, then work backwards to determine the right program design for your company.

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