Funding and ownership
Bad leaver
Someone who leaves in circumstances the equity scheme penalises, such as resigning early, misconduct or joining a competitor. Because most schemes are options, it usually means giving them all back: vested or not, they lapse. Where people hold actual shares, a bad leaver is forced to sell them back, often at what they paid or less.
A plain-English explanation, not financial or tax advice. Rules and rates change, so check your own situation. For free, impartial guidance, try MoneyHelper. Disclaimer.
You'll hear it as
Resign in the first two years and you're a bad leaver, so the options go back.
Why it matters to you.
Some schemes make anyone who resigns a bad leaver, whatever the reason. That can turn years of equity into nothing, so check the definition before you accept equity instead of salary.
Related terms.
Videos.
No video mentions Bad leaver by name yet. These are on the same topic, Careers & hiring.