There are many ways that a job can attract you to join its team and compensate you for your dedication and hard work. Some common ways are generous salaries, bonuses, and wellness stipends. Another method is issuing employee equity. This form of compensation is often used to attract and retain talent at both public and private companies. What is Employee Equity? Employee equity is a way for employees to get a stake in their company. Equity can be offered as restricted stock units (RSUs), performance shares, or options. It is also important to note that employee equity isn’t exclusive to employees–board members and consultants may also receive equity. How Employee Equity Works Every company has its own process for employee equity. However, the general process is that stock or options are awarded, and that’s accompanied by a vesting period. Within this context, a vesting period is the amount of time an employee has to work to have full rights to their employee stock. For instance, there may be a three-year vesting period for employee stock worth $5,000. A portion of the awarded stock will usually
By Stephen L. Thomas | May 14, 2024 | In