October 2022

RECOMMENDED

Building a stronger workforce with equity compensation

Nearly half (46%) of employers noticed an increase in resignations over the past year,¹ escalating the need to refine strategies to keep their workforce onboard and motivated. Many companies are using equity compensation as an incentive to attract and retain employees.

While there are different types of equity compensation, including stock options, restricted stock units, employee stock purchase plans and more, the underlying concept of equity compensation is that it gives employees a stake in the business they are helping to build and grow. For employees, equity compensation can be an attractive perk with the potential to share in the financial success of the company.

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For employers, the benefits can be equally appealing. For example, equity compensation can help:

• Support recruitment and retention. With the potential of an equity awards payout on top of salary, equity compensation plans can help make your benefits package more enticing to job candidates and provide a competitive edge. In addition, with a properly structured vesting schedule, employees will be motivated to stay with a company longer to receive the full benefit of their awards.
• Drive business performance. Having “skin in the game” can create an “ownership” culture that encourages employees to act in the best interest of the company and its future.
• Reward employees for results. An equity compensation plan can help align an employee’s performance with business goals and results. It’s a simple formula: The more successful employees can be in their roles, the greater the reward for all.
• Boost employee morale and satisfaction. As employees across the company work together to achieve the same goals, it can help build a stronger, more connected team.

To learn more about equity compensation plan design, implementation and employee communications resources, contact your Bank of America representative.