What is an equity incentive plan?

Equity incentive scheme refers to an incentive way for employees to enjoy certain economic rights by obtaining equity in the company, so that they can participate in enterprise decision-making, share profits and take risks as shareholders, thus serving the long-term development of the company wholeheartedly. It is a long-term core institutional arrangement necessary for the company's development.

Equity incentive is not to motivate all employees, but to motivate existing and future core personnel to be recruited. Focus on those who can be independent or indispensable, and at the same time consider the combination of the investment ability of the incentive object and the solution, and really consider it for the incentive object.

Extended data

The core purpose of equity incentive is to manage expectations, so as to motivate and improve the enthusiasm of employees. Therefore, the company must have a set of systems and rules when formulating the equity incentive plan, clarify the awarding conditions of the incentive object, and ensure relative fairness and rationality through the company performance appraisal.

Equity incentive is only a kind of company incentive system, and equity incentive is not a panacea to solve all problems. When doing equity incentives, we should consider other incentives.

Baidu Encyclopedia-Equity Incentive Plan