Equity Compensation
Equity Compensation is a non-cash payment that represents ownership in the company, used to attract, retain, and motivate employees.
Benefits
Equity compensation can help startups save cash. It also ties employees` rewards to the company`s success, motivating them to work harder.
Frequently Asked Questions
Is equity non-cash compensation?
Yes, equity compensation is a non-cash payment. It gives employees ownership or a share in the company instead of money.
What is equity cash payment?
The term "equity cash payment" is a bit misleading. Equity payments are not made in cash. Instead, they provide company ownership or shares.
What is the difference between cash compensation and equity compensation?
Cash compensation is money paid to employees. Equity compensation is company shares given to employees. The main difference is in the form of payment: one is cash, the other is shares.
Key Takeaway
Equity compensation is a powerful tool for companies, especially startups. It helps save cash and motivates employees by making them part-owners of the company.