What is single trigger vs double trigger acceleration?

Single-trigger acceleration refers to the partial or full acceleration of vesting of someone’s options or stock based on the occurrence of a single event, i.e. that event is the “trigger” for acceleration. Double-trigger acceleration refers to acceleration based on the occurrence of two distinct events.

What is a double trigger acceleration?

Double trigger acceleration requires the occurrence of two events for vesting acceleration to occur. Typically, this is a change of control and either termination without cause or the employee terminates for good reason.

Who should get double trigger acceleration?

Double-trigger acceleration is standard for stock issued to founders, and is occasionally used for executive-level hires. It is not typically given to other employees or consultants, because it is viewed as undesirable by acquirers and consequently VCs.

What is double trigger clause?

This approach is commonly referred to as “double trigger” acceleration upon an acquisition. It is so named because two events must occur before the employee stockholder will be treated as the outright owner without any risk of forfeiture-one, the company must be acquired, and two, the employee must be terminated.

How common is single trigger acceleration?

The most common acceleration agreement these days combines 25\% – 50\% single trigger acceleration with 50\% – 100\% double trigger acceleration. The median of this range is probably 50\% single trigger combined with 100\% double trigger.

What is a single trigger RSU?

It means that private companies can consider a new kind of single-trigger RSU—a liquid RSU—without requiring a cash outlay for an option exercise, waiting for an acquisition or IPO, or putting their employees at risk of an operational tax burden.

What is single trigger severance?

Single Trigger benefits are those provided upon the occurrence of a CIC, with no other factors necessary. A very small minority of companies (<1\%) have single-trigger cash severance benefits. Double triggers are the most common approach for CIC severance benefits (over 90\% of companies).

How common is double trigger acceleration?

How double triggers work RSU?

With double-trigger RSUs, the units may not settle on the same day the second event happens. For various reasons, it might take days or even weeks for your shares to settle. With double trigger RSUs, the time-vested event may occur over several tax years, but the liquidity event will likely occur in a single tax year.

What is double trigger vesting RSU?

What Are Double-Trigger RSUs? Double-trigger restricted stock units are those that aren’t taxable until two specific events occur. This differs from most RSUs provided by public companies, where shares are taxable immediately upon vesting.

What is a double trigger stock options?

To begin with, double-trigger acceleration is the partial or full acceleration of vesting of options or stock based on the occurrence of two different events. In this case, each event is a “trigger”, if both events occur, it becomes a “double trigger”.