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Employee Stock Plans

Trends In Equity Compensation: 2024

Content Team November 14, 2024 mins read

About the team

J.P. Morgan Workplace Solutions’ Content Team comprises a dynamic and talented team of writers and experienced professionals who strive to deliver useful equity insights and simplify complex equity information, all with the aim of helping you to better understand equity management.

Trends In Equity Compensation: 2024

To lift the lid on the current state of equity programs around the world we sought the views of the key stakeholders: the HR, comps and benefits and finance workers, who actually run them.

The results paint a nuanced picture of how companies of all kinds are currently seeking to recruit, reward and retain the best talent by creating a culture of ownership – and also tell a story of the pain points that spring up along the way. You can read the full report here.

Some key findings:

Recruitment and retention

Equity compensation continues to be the foundation of talent management strategies. When it comes to recruiting new employees 72% of respondents reported that it gives them a competitive edge when it comes to the hiring process.

Having an equity compensation plan can help to inspire staff and align their goals with those of company and its stakeholders, which in turn can help to drive better results. For 84% of respondents this alignment of objectives was a central reason for why they chose to introduce an equity plan in the first place.

Plan types

Many of the respondents told us their company offers more than one type of equity plan, with restricted stocks (60%), performance awards (52%), stock options (44%) and ESPP (25%) being among the most popular.

Of course, not every company will be in a position to offer a range of equity types or, depending on their goals for the plan and who it’s aimed at, some options may not be suitable. However, seeing an emphasis on restricted stocks and performance coming through in the results speaks to the widespread use of equity compensation to recruit, reward and retain those in leadership roles.

Which leads us to the next finding…

The C-suite, executives and equity compensation

Losing senior people to competitors can be a major cause of concern, with disruption to plans, loss of knowledge, skills, leadership and continuity all impacted. Not to mention the costs then involved in trying to recruit suitable replacements.

97% of public companies told us they offer executives either blended or equity-based incentives, while 83% of overall companies revealed that an equity compensation element forms part of their C- suite executives’ remuneration package.

When it comes to leadership and key-decision makers these employers really view granting them a share in the performance of the company as a major component in their benefits package.

Communication and education

Our survey found some common pitfalls when it comes to the introduction and running of an equity compensation program are under-promoting the plan to participants, losing sight of the target audience and not knowing how to measure success.

Nearly half of respondents told us that complexity was discouraging employees from signing up. Further to that 47% cited communicating about the plan itself with employees as a major pain point.

With this in mind the importance of developing an effective communications strategy is very clear.

Find out more:

These are only some of the findings, challenges and benefits experienced by both private and public companies in relation to their employee equity compensation offerings which you will find in the J.P. Morgan Workplace Solutions trends in equity compensation report 2024.

To download and read the full report, click here.

What next?

At J.P. Morgan Workplace Solutions we work with companies from around the world every day to help them bring their equity compensation and reward strategies to life. From plan design, to communications and executives services our offering was created to empower employees to easily navigate their workplace incentives with confidence.

Get in touch to speak to one of our experienced customer success managers about how we could help you.

Please Note: This publication contains general information only and J.P. Morgan Workplace Solutions is not, through this article, issuing any advice, be it legal, financial, tax-related, business-related, professional or other. J.P. Morgan Workplace Solutions’ Insights is not a substitute for professional advice and should not be used as such. J.P. Morgan Workplace Solutions does not assume any liability for reliance on the information provided herein.