Equity Compensation

Equity is a general name for using employer stock as a compensation tool for employees, using vehicles such as stock options, restricted stock, RSUs, etc.
Usually, equity is used in long term incentive plans, but there are tools such as ESPP that are for a shorter term.
Equity compensation as part of long term incentivization classically has two goals:

  1. Attracting and retaining employees
  2. Lining up employee interests with those of stockholders

Some ascribe another goal to equity compensation: this type of compensation plan does not affect the employer’s cashflow.

There are some common differences between large companies and startups when using equity as a compensation tool:

Startups Large companies
Compensation vehicle Mostly stock options Mostly RSUs and restricted stock
Eligible population Nearly all employees Senior employees and select groups
Grant frequency Upon hire and then irregularly Annually (not always for everyone)
How equity is quantified As percentage of the employer’s total share capital (both issued and outstanding, fully diluted) Monetary value of the grant (usually using the B&S model)

 

Due to these differences, we at Zviran have created two unique solutions for equity data:

Startups Large companies
Participants Dozens of tech startups

startups

 A few dozen large companies, mostly publicly traded, from various sectors

 
Equity quantification method As percentage of the employer’s total share capital (both issued and outstanding, fully diluted Monetary value (in ILS) of the grant (usually using the B&S model).

Results are presented in two ways:

  • Monetary value (ILS)
  • Percentage (%) of total compensation package
Populations Reviewed Member of the Board of Directors

  • CEO
  • CTO
  • VP R&D
  • CFO
  • Other executives
  • Middle management
  • First-line management
  • Experts
  • Professionals
  • Sales personnel
  • Students
  • Other employees
  • Executives
  • Middle management
  • First-line management
  • Professional
  • Junior Professional
  • Operational/administrative positions

Each of the positions also has separate data for R&D and non-R&D positions
Total dilution rate data Yes No
Single/Double trigger data Yes No
Languages Hebrew and English English

 

Each of these solutions includes:

  • List of participating companies: size, sector, etc.
  • Details on the equity vehicles (stock options, restricted stock, RSUs, etc.) and combinations thereof.
  • Population eligibility analysis.
  • New hire grant analysis.
  • Broad additional information on vesting periods, performance conditions, expiration, and so on.
  • ESOP clients enjoy some of the data being reported directly by ESOP (subject to client permission).