It turns out the less the pool is being divided, the less equity is being allocated to it. And that doesn’t appear to change with company size.
Companies are approaching allocation differently depending on size:
• 27% of all 1-5 employee companies plan to only share equity with one employee
• 20% of the 1-5 employee companies show interest in sharing the pool with more people in the organization.
• The larger organizations spread the pool more evenly with 81% planning to include more than one employee in the program.
However, those sharing more widely are allocating a larger pool of equity to share, and those including only one employee choose a smaller percentage:
• 51% of the companies planning to share widely across their organization plan to set aside 10% of their equity.
• While 86% of companies only sharing with one employee are only setting aside 5% for this purpose.
This would indicate that while some companies might be leaning heavily on equity sharing to retain one key employee above the rest, they are not willing to invest a lot. However, there is a definite understanding that larger companies cannot be stingy with the amount of equity they’re willing to share on a larger scale to remain competitive with smaller organizations.
