What is vesting in SAP PA-EC - Enterprise Compensation Management?

SAP Term: vesting

• Component: PA-EC

• Component Name: Enterprise Compensation Management

• Description: Tthe process by which awards become exercisable, that is, when an employee is allowed to purchase stock at a predetermined price.

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• Key Concepts: 
  Vesting is a term used in Enterprise Compensation Management (ECM) to describe the process of employees earning the right to receive certain benefits or compensation. It is a way of incentivizing employees to stay with the company for a certain period of time. 
  
  How to use it: 
  In ECM, vesting is used to set up rules and conditions for when an employee can receive certain benefits or compensation. This can be done by setting up vesting schedules that specify when an employee will be eligible for certain benefits or compensation. 
  
  Tips & Tricks: 
  When setting up vesting schedules, it is important to consider the needs of both the employer and the employee. Employers should consider how long they want employees to stay with the company before they are eligible for certain benefits or compensation, while employees should consider how long they are willing to stay with the company before they are eligible for certain benefits or compensation. 
  
  Related Information: 
  Vesting is closely related to other concepts in ECM such as stock options, restricted stock units, and performance-based awards. It is important to understand how these concepts work together in order to effectively manage an employee’s compensation package.