This work addresses the impact of the Mg activation anneal step and the resulting acceptor concentration on the channel mobility and VT stability of vertical MOSFETs. Increasing the annealing time with N2 only ambient and the annealing temperature with O2 in the ambient is shown to be effective in increasing the channel acceptor concentration. When the effective acceptor concentration is increased, the mobility is degraded due to a transition in the main scattering mechanism from Coulomb to surface roughness scattering. Degradation of the on-state current and maximum transconductance at high operating temperatures was linked to bulk mobility degradation of the drift layer due to lattice scattering. The two Mg activation annealing conditions considered here show different trends with regard to the threshold voltage stability, while N2 only ambient did not impact this parameter, including O2 increased threshold voltage instability. It is shown that increasing the Mg chemical concentration in the p-GaN layer degrades channel mobility and threshold voltage stability, irrespectively of the effective acceptor concentration, providing evidence for degradation of the channel/dielectric interface characteristics with higher Mg chemical concentration. This study shows that it is possible to achieve very low threshold voltage hysteresis and high channel mobility by reducing the Mg chemical concentration while maintaining high effective acceptor concentration. These results provide key insights for the development of vertical GaN FETs.