Equity Compensation Plans

The other important example of employee ownership in the United States is equity compensation, which is defined as employer-provided stock or stock equivalents. There are several different types of equity compensation, each with a unique structure, incentive structure, and tax treatment. The most prevalent types are as follows:

• Stock options
• Employee stock purchase plans (ESPPs)
• Restricted stock
• Phantom stock
• Stock appreciation rights (SARs)