TO incentivize employees to perform better and attract new talent, some companies offer equity-based compensation as part of compensation packages.

The term 'equity-based compensation' covers all types of employee equity schemes and comes in different forms, which include but are not limited to stock options, restricted stock units, stock appreciation rights and restricted share awards. These are granted to existing employees for services rendered and are typically dependent on performance, outstanding business achievements awards and exemplary organizational, technical or business accomplishments.