What is equity compensation in employment law?

What is equity compensation in employment law?

Equity compensation refers to non-cash pay that represents ownership in the company, often in the form of stock options or shares.

How does it differ from regular salary?

Unlike regular salary, which is cash-based, equity compensation provides employees with a stake in the company's success, potentially leading to higher long-term rewards.

What are the tax implications of receiving equity compensation?

Tax implications can vary; generally, you may owe taxes when you exercise stock options or when shares vest, depending on the type of equity.

Can you explain the vesting schedule?

A vesting schedule outlines when employees earn their equity compensation. It typically spans several years, encouraging retention.

What should I consider before accepting an equity compensation offer?

Consider the company's growth potential, your financial situation, and how the equity fits into your overall compensation package.