Equity Compensation
Start-up or development stage companies that don’t have much capital or brand recognition to recruit and retain top talent often offer equity compensation to attract employees. That is, the employees receive ownership stakes in the business.
This compensation is generally in the form of stock options which is an option to purchase shares in the company at an established predetermined low price over a specific time-frame. However, these shares usually do not have the same rights as the founders’ shares. For example, they may not have the same voting rights as the shares of a company founder.
Author: Kris Tabetando
Kris Tabetando provides mergers & acquisitions (M&A) advisory and brokerage services to Internet companies. He also partners with investors to acquire & manage Internet businesses.
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