The Retention Revolution: Equity compensation strategies in 2025

Equity compensation is usually predictable when it comes to specific industries and role types within businesses, however there are points in time where the perception and impact of share plans change due to market conditions or other external factors. In this article we explore some of the most recent data pulled from our 2025 public and private company surveys to analyse how equity compensation strategies are shaping up in 2025.

You can read more about the specific data around public share plans in our State of Equity 2025 report and you can also access the private data in our State of Equity 2025 report.

The wider market conditions

Before diving into the data, let’s explore the wider context around market environments and influential factors. Economic factors have been seemingly more volatile in recent years, and the tech market has certainly seen it’s fair share of low points. The well documented layoffs (TechCrunch) have been consistent in recent years, each month in 2025 has seen additional household names reduce their workforces.

The continued rise of AI has brought on flashbacks of the inflated valuations of the past, with money pouring into scaling AI companies as the unprecedented growth and potential looms. Without knowing how high the ceiling is or how quickly it might be reached, AI is an area where the typical investment and growth trends of recent years have been turned on their heads.

Balancing retention and talent attraction in equity

Imagine equity compensation as a delicate balancing act. On one side of the scale sits talent attraction, your ability to entice new hires with compelling ownership opportunities. On the other side sits long-term retention, keeping your best people engaged and committed for years to come.

The challenge? The very mechanisms that tip the scale toward one goal often work against the other. Vesting schedules, performance conditions, and cliff periods act as the critical adjustment points on this scale. Make these hurdles too low, and equity becomes easily attainable, boosting your recruitment appeal but potentially undermining retention as employees quickly vest and move on. Set the bar too high, and your existing team stays motivated for the long haul, but prospective candidates may view the equity as unattainable, weakening your competitive edge in the talent market.

This fundamental tension forces companies to make strategic choices about where their equity programs should focus their greatest impact. And, offers a compelling challenge to introduce new mechanisms and equity offerings, such as refresher grants, that appeal to both new talent and existing employees.

What are the trends in 2025?

Starting with the company view, our State of Share Plans 2025 report revealed that 51% of companies ran share plans to boost their employment proposition. Meanwhile, 53% said that share plans were an efficient way to reward employees at key milestones. Only 26% of businesses in the survey reported that they run share plans just because they always have, which shows that equity is generally used as a positive instrument, as opposed to an arbitrary process.

The impact on employees and talent however was much clearer. Our State of Equity 2025 report unveiled that 65% of employees would be more likely to stay with their company for longer if they were offered more equity. And, 79% of respondents said that equity has a positive impact on motivation. When asked about how equity options would impact applying for roles, 50% of respondents revealed they would be ‘more likely’ to apply for a role if they were offered equity. The biggest surprise is that 25% of respondents said they would only apply for roles that offered equity, which shows an overwhelming interest in equity awards as part of remuneration packages.

Summary

Expectations from both employers and employees have risen since the remote working revolution, in many ways for the better. With regards to equity, employees certainly expect more and are also receiving more given 82% of respondents in our State of Equity 2025 report said they owned equity in their company - this was only 70% in 2024. We also observed an increase in ownership in every country that was surveyed, emphasising the increased equity on offer by companies in 2025.

Market recovery is restoring confidence in equity value, while high-profile secondary transactions and IPOs are creating tangible success stories that employees can't ignore. When teams see colleagues cashing out meaningful stakes, equity transforms from an abstract benefit into a concrete wealth-building opportunity.

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