DATE PUBLISHED: DECEMBER 12, 2024
Equity plans serve as a vital mechanism for attracting executives and employees and retaining current talent. However, equity compensation results in a transfer of wealth from existing shareholders to employees and can dilute shareholders’ stake in a company. Amending or approving an equity plan requires shareholder approval, and investors may push back on poorly designed plans.
Equity plan design and its underlying governance features have evolved over time, reflecting investor preferences as well as the desire of compensation committees to have flexibility in administering these plans. This report delves into equity plan features and examines key trends observed over the past five years.
