Expert: Ed McFarland - 10/5/2006

Question
I started a new job as Media Director of a company in April.  Recently the CEo told me that they were going to offer me equity in the company as opposed to a bonus.  What exactly does this mean and how does it work?  Also, I take it that it is not like stock in that if one eventually leaves the equity is gone. Thanks.

Answer
You are being offered ownership in the company.

What you want to find out what the vesting schedule is. That means how long do you have to stay to actually make it yours. It is often used to get a long term commitment out of somebody and to reward them now with cash that would come later.

It could be a good thing, you need to ask more about it.

Good luck