Pay · HR glossary

Equity Compensation

Equity compensation gives employees a financial interest linked to company ownership or share value. It can include shares, restricted awards or options with specific conditions.

Example

An employee receives share options that may be exercised after vesting, subject to the plan's price, timing and other requirements.

What to keep in mind

Different award types have different rights, costs and tax consequences. Ownership-related compensation can lose value or be difficult to sell, so distinguish an award's quoted value from money available to the employee.

Further reading

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