Startups
Equity Evolution: Transforming the Future of Work
The future of work as we know it is shifting radically in new directions. Remote setups, digitalization, flexible arrangements, and a focus on work-life balance - these are just some of the forces that are transforming work as we know it. But it’s not just the way that we work that’s changing. We’re also seeing shifts in how people are compensated and incentivized for their work. In this article, we look at one major shift in work compensation: share-based models. Let’s dive in.
Share-based compensation: Challenges for startups
Share-based compensation is standard practice for most publicly traded companies when it comes to retaining employees and attracting talent. With appropriate structuring, this form of remuneration represents a liquidity and equity-friendly alternative to classic bonus payments, especially for growth-oriented companies such as startups. Both for listed companies and start-ups, (capital market) legal and tax issues are major obstacles in the course of the structuring and implementation of corresponding programs. In addition to these hurdles, the following problems arise, especially for startups, in order to be able to exploit the full potential of share-based payment programs.