Chapter 16

Equity-Based Compensation


There is a mechanism for providing employees (usually executives) with a substantial monetary benefit and also aligning their interests with shareholder interests. Equity-based compensation programs transform employees into shareholders. There are numerous different options to create this transformation. The company could use one of several strategies to transfer actual shares to employees, or they could create an asset that gives them stockholder incentives without having the requisite voting rights. Each strategy has different pros and cons, and each different taxation. If you are either an executive or a professional who might advise someone who is, then this chapter will provide you with valuable ...

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