Do you what is Equity Compensation?

Equity compensation can be defined as non-cash pay that represents ownership in the firm.

So non-cash mean ?

Simply the company rewards to the employee or someone which does not involves any cash, but monetary value. So this may happen in any form like, performance shares, options or restricted stock.

So basically as an employee you owns some shares, usually hold that for long time. While it help to be more loyal to the company, at the same time you earn the part of profit that company generates.

Companies give this kind of compensation to employees, to make them more loyal and also to retain the talent in the company in the long run .

Now we need to understand what those forms of compensation means !!!!

but every those mentioned form of compensation, gives employees with some special consideration in price or terms.

Stock options : With this type of compensation, employee can buy fixed amount of the company shares in a fixed rate withing some predefined years in future.

Restricted stock : It is the right of the employee to receive some shares of company, based on his performance in the company or after completion of some years of working in the company etc.