Global HR Glossary

What is an Equity Grant? 

An equity grant is a compensation tool in which companies offer employees shares or stock options as part of their remuneration package. This method aligns employees' interests with business outcomes by providing a financial stake in the company's success.

Benefits and Structure of Equity Grants 

Equity grants are typically subject to a vesting schedule, which might include:

• Time-based vesting, where shares vest over a period.
• Performance-based milestones. 

Such grants encourage long-term commitment and help companies retain top talent by offering them a share in potential future gains. They are especially prevalent in startups and growth-oriented companies where cash flow conservation is critical.