Equity Compensation for Regular Employees

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Would you like to See Equity Compensation for Regular Company Employee

Game Option: Enable or Disable Employee Equity Compensation
6
46%
Base Game: Required for R&D Staff Optional for General Staff with Benefit
5
38%
Other Post Below
2
15%
 
Total votes: 13

standardplayer
Community Contributor
Community Contributor
Posts: 166
Joined: Sun May 12, 2019 1:50 am

Equity Compensation for Regular Employees

Post by standardplayer »

Equity Compensation for Regular Employees:
*R&D Employees would receive a significant part of their compensation in Equity say ~20% for Median/Average R&D Employees
*General Staff would receive a Small amount of their compensation in company equity say ~5%

Equity Compensation:
*R&D Employees: $75,000-$100,000+/year x 20% = $15,000-$20,000/year / $10/Share = 1,500-2,000/Shares
*General Employees: $20,000-$30,000+/year x 5% = $1,000-$1,500/year / $10/Share = 100-150/Shares

Employee Shareholders would show up as an aggregate number on the Shareholder List called something like (Insert Company Name) Employees or Employee Stock Holders

Anti Dilution Buyback: Buyback that purchases shares from Public to counter act the effect of Employee Stock Grants.

Potential Options:
*Game Option: Enable or Disable Employee Stock Compensation
*Base Game: Equity Compensation Required to get R&D Employees and Optional for General Staff if they receive equity they get a productivity benefit or boost because they are owners.
standardplayer
Community Contributor
Community Contributor
Posts: 166
Joined: Sun May 12, 2019 1:50 am

Re: Equity Compensation for Regular Employees

Post by standardplayer »

I was reading a lot about successful technology companies and startups recently and learned some new things. This may be something that we really want to look at. It would add an additional layer of realism and complexity to the game because owners would have to deal with the dilution caused by these employee stock grants making it harder to grow or maintain their ownership.

What I learned:
Most Venture Capitalists require their startups to reserve ~20% of their shares for equity/option grants to employees so that they can attract and retain highly competent employees in executive/management, engineering, and general positions most of the successful FANG tech companies still do this. These grants typically vest over 4 or more years leading to an annual dilution of between ~2%-4% of outstanding shares. The majority of those shares go to Executives and Product R&D Engineers but, they typically grant some shares to employees at all levels.
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