Equity Compensation

Equity compensation refers to a method companies use to reward employees by giving them ownership stakes in the company, often in the form of stock options or restricted stock units (RSUs). Instead of only paying cash salaries, companies offer shares that can increase in value if the company performs well. This aligns employees' interests with the company’s success, as they benefit directly from increased share prices. Equity compensation can be an attractive part of a total compensation package, especially in startups and tech firms, where potential growth offers significant financial upside for employees.