Understanding Equity Compensation

Equity compensation, often part of an employee's total compensation package, can come in various forms such as stock options, restricted stock, and employee stock purchase plans. These compensation methods provide employees with opportunities to build wealth while leveraging their company's success. For instance, stock options allow employees to buy company stocks at a predetermined price, potentially lower than the market price, leading to favorable financial outcomes. Participating in these programs can also offer tax benefits, making it advantageous for employees to understand and take advantage of their equity compensation options.