Equity Based Compensation (ESOP, NSO, ISO, SAR, etc.)

We design and implement equity-based incentive compensation plans in order to enable our clients to attract and retain top talent while keeping in mind the legal and tax implications of the compensation plan. At Igniters, our team brings unparalleled expertise and experience to the legal design and implementation of equity-based incentive compensation, especially Employee Stock Ownership Plans (ESOPs).

Equity based incentive compensation serves as a valuable incentive, aligning employee interests with business success, as they stand to benefit directly from the company's rising stock value. These compensation plans significantly improve companies’ ability to get and retain talent. These compensation plans are especially important for startups, as they have limited resources available to attract talent which is in contrast to their great need for talented individuals who will make great contributions to the startup. Equity based incentive compensation plans also greatly affect a startup’s valuation in an investment round and must be implemented in line with the company’s plans for growth. Choosing the right equity based incentive compensation tool is not an easy task for companies, as the jurisdiction of incorporation, the residency of the employee, tax and social security considerations all play a part in making the correct choice.

There are many types of equity based incentive compensation tools available for use; for example, non-qualified stock options (NSOs), incentive stock options (ISOs), restricted stock, profits interests, phantom equity, stock appreciation rights (SARs). The choice of equity based incentive compensation also varies from jurisdiction to jurisdiction, as some jurisdictions do not allow for some of these options. Also, each and every one of these tools have different tax implications which is an important consideration that must be taken into account together with other considerations. Whether or not “at will employment” is allowed as per the law applicable to the employment contracts should also be a consideration in the choice of equity based compensation used. At Igniters, we evaluate your company’s place of incorporation, the location of its employees, contractors and advisors, as well as your growth and business plans to ensure that you make the best choice.

With hundreds of successful implementations under our belt, we are renowned in the industry for our well-structured and business-friendly packages, that also comply with all relevant jurisdictions, for a fair price. Choosing our team’s expertise allows for an equity based incentive compensation structure that will not hinder but facilitate growth as well as investment and due diligence processes in the future.