Overview
Kamsa helps you model equity needs and establish consistent equity grant guidelines for new hires, refresh grants, and promotions.
This guide covers:
Equity Model: Models new hire and refresh grant needs and projects dilution
Equity Guidelines: Stores your finalized equity grant guidelines for use in Comp Review
The Equity Model
The Equity Model helps estimate the number of shares needed for new hire and refresh grants and projects the resulting dilution.
Note: If you do not see the Equity Model in your workspace, contact [email protected].
How the Equity Model Works
The Equity Model uses:
Your company’s growth projections
Your estimated per share value
Kamsa’s Equity Market Data
For new hire grants:
Midpoint = Market equity value ÷ estimated per share value
Minimum = 85% of midpoint
Maximum = 115% of midpoint
Most clients use the midpoint as the standard new hire grant guideline.
The Control Panel allows you to enter the estimated per share value used to calculate grant guidelines. The estimated per share value is calculated using your company’s preferred share price and most recent 409A valuation.
Kamsa’s compensation experts can help you determine the appropriate per share value and update your model as needed.
Outputs
The Equity Model provides:
New Hire Grant Guidelines by job category and level
Projected Shares Needed for new hire and refresh grants
Estimated Dilution based on fully diluted shares
You may also want to include an additional buffer for promotions, executive hires, or other unplanned equity needs.
Refresh Grants
Refresh grants are additional equity awards that may be used for retention and ongoing recognition.
Common guidelines include:
Eligibility: Often considered after 2+ years of service
Recommended Grant guideline: Typically 25% of the applicable new hire grant guideline
Cadence: Typically reviewed annually
Performance: Some companies limit refresh grants to top performers
When you run a Refresh Grant program in Comp Review, the applicable values from Equity Guidelines flow into the review.
Promotion Grants
Promotion grants ensure equity alignment when an employee moves into a higher-level role.
A common approach to calculating promotion grants is:
Promotion Grant = New Hire Grant Guideline for New Role minus Employee’s Unvested Shares
If the resulting amount is lower than the applicable refresh grant guideline, use the higher value.
The refresh grant guideline is typically 25% of the new hire grant guideline for the employee’s current role.
Once your equity grant guidelines are finalized in the Equity Model, enter them into Equity Guidelines so they can be used consistently in Comp Review.
Equity Guidelines
The Equity Guidelines section stores your company’s finalized new hire equity grant guidelines for use throughout Kamsa.
Guidelines can vary by:
Job Group (e.g., technical vs. non-technical)
Country (with optional geographic differentials)
Job Level
Once entered, these guidelines flow into Comp Review to support consistent equity recommendations.
Geographic Differentials
You can create country groups and apply geographic differentials to your U.S. equity guidelines.
FAQs
What are the common types of equity grants?
New Hire Grants: Granted at time of hire
Refresh Grants: Additional grants that may support retention and ongoing recognition, often tied to performance and tenure
Promotion Grants: Additional grants given during a role promotion
How are new hire equity grant guidelines calculated?
Kamsa uses Equity Market Data and your company’s estimated per share value to calculate new hire grant guidelines.
The market equity value is divided by the estimated per share value to determine the midpoint.
Minimum = 85% of midpoint
Midpoint = Market equity value ÷ estimated per share value
Maximum = 115% of midpoint
What are common guidelines for refresh grants?
Common refresh grant guidelines include:
Reviewing eligibility annually
Considering employees after 2+ years of service
Typically 25% of the applicable new hire grant guideline
Limiting grants to selected employees based on performance (i.e., top performers) or retention needs
How are promotion grants calculated?
A common approach is:
Promotion Grant = New Hire Grant Guideline for New Role − Employee’s Unvested Shares
If the resulting amount is lower than the applicable refresh grant guideline, use the higher value.
Can Equity Guidelines vary by country?
Yes. You can create country groups and apply geographic differentials to your U.S. equity guidelines.
This allows equity guidelines to vary by location while maintaining a consistent overall structure.
How do Equity Guidelines flow into Comp Review?
Once your finalized guidelines are entered into Equity Guidelines, Kamsa automatically uses the applicable guidelines in Comp Review to support equity recommendations.
For additional questions, contact [email protected].