equity-compensation

Vocabulary Word

Definition

The term 'equity compensation' refers to a non-cash payment that represents ownership in a company. It's like getting compensated with a slice of the company, which can include stock options, restricted shares, or other types of equity.

Examples in Different Contexts

In employee benefits, 'equity compensation' refers to stock options or shares given to employees as part of their remuneration. An HR manager might note, 'Equity compensation is an excellent way to give employees a stake in the company's future.'

Practice Scenarios

Tech

Scenario:

Our team has been putting in incredible work on this project. It's important that we show them how much we value their contributions.

Response:

How about we introduce an equity compensation package? It could make the employees feel more connected to the company's success.

Business

Scenario:

Our startup could benefit from creative methods of compensation. If we can't compete in terms of salaries, we need to think outside the box.

Response:

We should consider an equity compensation approach. Considering our company's potential, a share in ownership could be attractive to top talent.