Companies offer equity compensation for several reasons:
Attracting Talent: Equity compensation can make a job offer more attractive to top-tier candidates, especially in competitive industries like tech and biotechnology. Retention: Vesting schedules encourage employees to stay with the company longer to fully realize the benefits of their equity. Performance Alignment: By giving employees a financial stake in the company, equity compensation aligns their interests with those of the company and its shareholders. Cash Flow Management: Startups and smaller companies often use equity compensation as a way to conserve cash while still offering competitive compensation packages.