Compensation Elements
Equity compensation
Also called: stock comp, equity grants, equity award
Compensation paid in company stock or rights to acquire stock — typically RSUs, options, or PSUs.
Equity compensation transfers ownership in the company to employees as part of pay. The most common forms:
- Restricted stock units (RSUs) — promise to deliver shares on a vesting schedule (e.g., 25% per year over 4 years)
- Stock options — right to purchase shares at a fixed price for a fixed period; valuable only if stock appreciates
- Performance shares (PSUs) — units that vest based on company-performance metrics rather than time
- Employee stock purchase plans (ESPP) — let employees buy company stock at a discount
Equity is the dominant compensation lever in technology, biotech, and senior leadership. Annualizing it for benchmarking requires a "grant date fair value" or "expected value" calculation, which most surveys publish.