The period during which all the vesting conditions set out in a share-based payment arrangement have to be satisfied. Vesting is the mechanism/ process by which a counterparty becomes entitled to a right (e.g., an option to exercise on an underlying). Under a share-based payment agreement, a counterparty’s right to receive cash, other assets or equity instruments from an entity conferring the right would vest (i.e., becomes officially bestowed) when the counterparty’s entitlement ceases to be conditional on the satisfaction of the vesting conditions.

For example, for an employee stock option (ESO), a vesting period is the span of time during which the option remains active, i.e., exercisable, and the respective employee has the right to exercise the option (by purchasing the shares issued by the entity).