Equity Compensation Programs
Understanding RSUs, stock options, and ESPPs as tools for wealth generation.
Equity compensation aligns employee incentives directly with the company's long-term valuation. Programs include Restricted Stock Units (RSUs), traditional stock options, and Employee Stock Purchase Plans (ESPPs) offered at a discount. In the startup ecosystem, equity is the primary vehicle for generating generational wealth. Mature public companies use RSUs to ensure their workforce acts like owners, sharing in the financial upside of corporate success. Transparent education around vesting schedules, strike prices, and tax implications is vital to ensure employees actually understand and value this complex benefit.
Related Knowledge Articles
Frequently Asked Questions
What are RSUs?
Restricted Stock Units are company shares granted to an employee that vest over a specific schedule.
What is an ESPP?
A program allowing employees to purchase company stock, usually at a 10-15% discount off the market price.
Why is equity better than a cash bonus?
While cash is immediate, equity offers the potential for massive exponential growth if the company scales.
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