September 5, 2018
Three Keys to a Good Equity Plan
– Liz Dunshee
Compliance, best practices & flexibility: according to this blog from Exequity’s Ed Hauder, these are the three keys to a “good” equity plan. This isn’t groundbreaking advice – but it can be easier said than done. Here’s an observation from Ed:
I listed the keys for a good plan in order of their applicability. In order to have a viable equity plan, it has to comply with the applicable rules, i.e., compliance. To have a better equity plan, it should reflect current best practices in its provisions (vesting, CIC, award limits, share limits, etc.).
Finally, to be a good plan, an equity plan needs to have sufficient flexibility to allow the company to address issues that arise, even if not expected. In my experience, the hardest thing for an equity plan to do is to incorporate adequate flexibility and reflect current best practices.