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Equity Compensation Plans: What to Do & What NOT to Do

Equity Compensation Plans: What to Do & What NOT to Do

 

Photo Credit: Images_of_Money

An equity compensation plan is an innovative tool used by many businesses and corporations within the United States and worldwide. Creating and implementing a quality plan into action can be a challenge, but with these few simple tips, you can maximize the experience for you and your employees.

Don’t Do The Following:

Don’t make promises you don’t intend to keep: Be as clear and concise as possible when you are putting emphasis on the various benefits associated with your employees’ equity compensation plan. Be careful with any language used to ensure that uncertain outcomes are not unintentionally promised as certain outcomes.  Documents always need to be written by a qualified attorney.

Don’t wait until a candidate is an employee: Having quality options and an impressive equity compensation plan can serve a company very well in any business recruiting procedure. It could prove to be very effective in creating buzz among potential employees if Human Resources highlight the various benefits during their interviews and recruitment activities.

Don’t expect your employee to speak fluent finance language: Be as basic as possible in your terminology; this will allow the largest possible amount of employees to understand the vast majority of their equity compensation plan. Always be sure to have a fresh set of eyes (perhaps someone in a different department) look over the document and make appropriate edits.

Do The Following:

Do over communicate: You will find that there are endless outlets willing to offer up advice concerning equity compensation plans, but with each equity compensation plan being unique, finding information online can leave employees feeling like they are filling in blank spaces with information found on the web. Be in constant communication and don’t allow your employees to make assumptions that could leave them expecting more than you are prepared and able to provide.

Do use tangible examples: Be sure to have explanations prepared to further help your employees understand their equity compensation plans. Creating examples that could be real life scenarios will help prepare employees for the future.

Do use various methods of media: Every brain processes information differently and every individual grasps new and challenging material through various methods of learning. Equity compensation plans can be confusing, so having various ways of disseminating the information will be helpful for employees with different learning styles. Be sure to cater your materials to various methods of learning. Have something for visual learners, audible learners and everything in between.

Here at Stock Connections, we focus on helping you and other business owners with any questions or concerns they may have so they can have the opportunity to provide the most financially fit and sound equity compensation plan to their company or corporation. If you are looking to have your questions answered or want some help with your equity compensation plans then we encourage you to contact us for a personalized conversation and assessment of your equity compensation goals.

 

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