What are the most effective equity compensation packages for marketing professionals?

1 Types of equity compensation

As a marketing professional, you may encounter different types of equity compensation, depending on the size, stage, and industry of the company. Stock options give you the right to buy a certain number of shares at a fixed price within a specified period. You may have to pay taxes and fees when you exercise and sell your options, and you may lose them if you leave the company before they vest. Restricted stock units are grants of shares that are received after meeting certain conditions, such as working for a certain period or achieving certain goals. You do not have to pay anything to receive them, but you have to pay taxes when they vest. Stock appreciation rights are similar to stock options but instead of giving you the right to buy shares, they give you the right to receive the difference between the market price and the strike price in cash or shares. With SARs, you do not have to pay anything to receive them, but you have to pay taxes when you exercise them. However, with all three types of equity compensation, there is a risk that you may lose them if you leave the company before they vest, and there may be less flexibility over when to exercise them.

2 Factors to consider

When evaluating and negotiating your equity compensation package, you should consider several factors that affect its value and suitability for your situation. For instance, you should take into account the amount and percentage of equity offered compared to industry benchmarks and market rates, as well as the salary and benefits. Additionally, you should examine the vesting schedule and terms, such as the vesting period, vesting cliff, vesting frequency, expiration date, and post-termination exercise period. Furthermore, it is important to consider the valuation and growth potential of the company by researching its financial statements, funding history, market share, competitive advantage, and future plans. Generally speaking, the higher the risk and uncertainty of the company, the more equity you should expect; a shorter vesting period with a longer expiration date and post-termination exercise period is better for you; and a higher valuation with greater growth potential makes your equity more valuable.

3 Negotiation tips

When negotiating your equity compensation package, you should do your homework to understand the company, industry, and market. You should also assess your own value and expectations to determine what are the most effective equity compensation packages for similar roles and levels, and what are your minimum and ideal offers. During the negotiation, you should be confident and assertive in communicating your value and skills to the employer, while expressing interest in the company and its vision. You should also be flexible and creative in exploring various alternatives and trade-offs, while being realistic and pragmatic. Lastly, you should stand up for your rights and interests, and avoid accepting an offer that is below your standards or that does not align with your goals.

4 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?