Overview
Equity is a critical part of a company’s compensation strategy. Kamsa helps you establish, manage, and apply consistent equity grant guidelines across your workforce.
This guide explains the Equity Model, Equity Guidelines, and best practices for new hire, refresh, and promotion equity grants.
The Equity Model
The Equity Model calculates the number of shares your company needs for new hire and refresh grants, while also projecting overall dilution.
How It Works
Inputs: Your company’s growth projections, estimated per share value, and Kamsa’s proprietary Equity Market Data.
New Hire Model: Uses Kamsa’s market data (typically the 50th percentile) divided by your company’s estimated per share value.
Midpoint = Market value ÷ estimated per share value
Min / Max = 85% and 115% of the midpoint
Most clients use the midpoint consistently for offers.
Control Panel: Drives the ranges by applying your estimated per share value, calculated as your company’s preferred share price minus the last 409A valuation.
Kamsa’s compensation experts are available to help you select the right per share value and update your model as needed.
Outputs
New Hire Grant Guidelines by job category and level
Total Shares Needed for the year (new hires + refreshes)
Estimated Dilution Rate based on fully diluted shares
We recommend adding a buffer for executives, promotions, or unexpected hires (e.g., M&A activity).
Refresh Grants
The Equity Model also projects shares needed for refresh grants, commonly given to employees with 2+ years of service.
Recommended Guideline: 25% of the new hire grant guideline for the employee’s job category and level
Cadence: Typically reviewed annually
Eligibility: Leaders may choose to grant refreshes only to top performers
When you run a Refresh Grant program in Comp Review, the guidelines from the Equity Guidelines section automatically flow in for consistency.
Promotion Grants
Promotion grants ensure equity alignment when an employee moves into a higher-level role.
Typical Guideline:
New hire grant guideline for the employee’s new role
minus the employee’s unvested shares
If that calculation is lower than 25% of the new hire guideline for their current role (i.e., the refresh grant guideline), use the higher of the two.
✅ Next Step: Once your Equity Grant Guidelines are finalized in the Equity Model, enter them into Equity Guidelines to ensure consistency across Comp Review.
Equity Guidelines
The Equity Guidelines section is where you enter your company’s new hire equity grant guidelines. These guidelines determine the value of a new hire grant based on:
Job Group (e.g., technical vs. non-technical)
Country (with optional geographic differentials)
Job Level
Once finalized, these guidelines flow directly into Kamsa’s Comp Review tool, ensuring leaders have consistent data when making equity recommendations.
Geographic Differentials
You can create country groups and apply geographic differentials against U.S. guidelines. This ensures equity grants align with local markets as your company scales globally.
FAQs
What are the common types of equity grants?
New Hire Grants – at time of hire
Refresh Grants – ongoing retention program, often tied to performance and tenure
Promotion Grants – given during a role promotion
What are best practices for refresh grants?
Annual review cadence
Apply guidelines only after 2+ years of service
Typically 25% of new hire guideline
Can be limited to top performers
What are best practices for promotion grants?
Use the new hire guideline for the new role minus unvested shares
If that’s lower than 25% of the current role’s new hire guideline, use the higher value