What is the Grant Date?

A grant date is the date on which a stock option or other equity-based award is granted to the recipient. The grant date is considered to be that date on which an employer and an employee agree upon the most essential terms and conditions associated with the award. If shareholder approval is needed, then the grant date is considered to be delayed until that approval has been obtained, unless shareholder approval is considered to be perfunctory. The same consideration applies when approval by the board of directors or a member of management is required.

Grant Date Example

As an example of a grant date, Big Tree Corporation grants its sales manager 10,000 stock options as part of her annual compensation plan. The grant date of these options is January 1, 2024. This is the designated date on which she receives the options, and represents the beginning of her vesting period. The stock options have a vesting schedule that spans five years, where 20% of the options will vest after one year, another 20% after two years, and so forth. By January 1, 2029, all 10,000 stock options will have fully vested.