Design an employee equity compensation plan
A stage-appropriate plan covering equity instruments, pool size, grant guidelines, vesting terms, pitfalls, and how to explain it to employees.
The prompt
Help me design or review an equity compensation plan for my company.
Company stage and type: [e.g. "Series A startup", "private profitable company", "public company"]
Where employees are based: [COUNTRIES or STATES]
Headcount and hiring plan: [NOW and NEXT 12-24 MONTHS]
What we want equity to do: [attract talent / retain key people / align with an exit / reward performance]
Current plan, if any: [pool size, instrument, vesting, refresh policy]
Constraints: [dilution limits, cash position, investor requirements]
Cover:
1. Instrument options that fit our stage: stock options (e.g. ISOs and NSOs in the US, or local equivalents), RSUs, restricted stock, phantom stock or SARs, profit-sharing units. For each: how it works, when tax generally applies for the employee and company, admin burden, and when it fits.
2. Pool size: typical ranges for our stage and the trade-off against dilution.
3. Grant guidelines by level: a framework (percentage or value bands), not fixed numbers I haven't confirmed.
4. Vesting and terms: cliff, schedule, refresh grants, exercise window after leaving, acceleration on change of control, and what each choice does to retention and fairness.
5. Common failure modes: grants employees don't understand, pool used up too early, unequal grants driven by negotiation, valuation (e.g. 409A) and securities-law issues, international employees.
6. Employee communication: an outline for a plain-language explainer so people understand what they own and what it could be worth.
Return a short plan with a summary table: Element | Recommendation | Rationale | Open question.
Mark any benchmark you're unsure applies to us [CONFIRM]. This is general information, not legal or tax advice. Have a qualified lawyer and tax advisor review the plan before adopting it.
Highlighted [brackets] are blanks to replace with your own details.
Fill in the blanks and use this promptMore HR & Hiring prompts
What to fill in
- COUNTRIES or STATES
- NOW and NEXT 12-24 MONTHS
- pool size, instrument, vesting, refresh policy
- dilution limits, cash position, investor requirements
- CONFIRM
How this prompt is built
This prompt follows the Few-Shot structure (Few-shot prompting). A few-shot prompt includes one or more worked examples of the input and the output you want, so the model can copy the pattern instead of guessing it.
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