How do you mean that it is "the perfect solution" if the action has negative morale implications for every other employee?
I'll go with your opinion being that it may be the best solution, but perfect it is not.
The mere fact that I don't even think it's the best solution means that there may very well be employees here who also don't, which means it's not perfect.
There will be employees who will hear "this fired person's stock was taken out of your end of year bonus". Because it kinda was. Especially at a small company where one employee-month plus their stock can be a significant portion of company yearly profits.
They should have changed stuff up well before this point. If you want to question someone’s vestment then do that at least a year before that date and get serious about demanding results from the problematic employee at that point. That way they’ve got 3-6 months to perform and you’ve got time to terminate for lack of performance.
Doing it when the vestment date comes up just reeks of shortsightedness to the point of vindictiveness. Immaturity.
If it’s like the person quit but kept coming to work for the last month before vestment then talk to them and maybe offer to buy them out if they’ve got no good explanations.
I'll go with your opinion being that it may be the best solution, but perfect it is not.
The mere fact that I don't even think it's the best solution means that there may very well be employees here who also don't, which means it's not perfect.
There will be employees who will hear "this fired person's stock was taken out of your end of year bonus". Because it kinda was. Especially at a small company where one employee-month plus their stock can be a significant portion of company yearly profits.