Most start-ups want to ensure that their employees and consultants are fairly paid, and it can be difficult to match the salaries, bonuses, and benefits offered by established businesses. A common way that start-ups bridge that gap is by offering equity compensation to early-stage consultants and employees who provide valuable contributions to the business’s growth.
Care must be taken, however, with equity compensation. Without the proper documentation in place, companies may run afoul of the securities laws, and consultants and employees risk incurring very steep tax penalties.
We help clients structure and establish equity compensation plans to minimize risk and maximize benefits to early stakeholders.