Companies use equity compensation plans to pay their employees, officers, non-employee directors, and other service providers by giving them equity ownership at the company. Equity compensation is common in both public and private companies. Companies view equity compensation as an effective way of incentivizing plan participants while attracting high-quality employees, encouraging retention, motivating sustained performance, and aligning employees’ interests with those of shareholders.
This report discusses the current state of equity compensation plans as well as the trends and different practices in different industries. The report also provides an insight into the latest trends on the typical equity plan features and dilution. In addition, we review factors that may contribute to low shareholder support levels in equity compensation plan proposals.