Equity Refresh Grants: When and How Often to Refresh Options

Equity is one of the most powerful compensation levers available to privately held companies AKA startups. We get asked weekly: How do equity refreshes work? In this week’s PC data drop, we’re breaking down what equity refresh grants are, when companies actually use them, and how to make them sustainable and strategic. All data is pulled from the Thelander Platform, via a Private Company Subscription.

Equity refresh grants are follow-on equity awards for existing employees whose original grants are fully vested. They’re designed to keep key employees incentivized and aligned as the company grows. Here’s what you need to know:

1. You can’t refresh everyone. Focus on top performers in key roles vs. trying to top up the entire company.
2. How much to refresh depends on how right you got the original grant. If someone started significantly below market, their refresh will look different than someone who was already at (or above) your ranges.
3. How do the refreshes fit with your employee option pool? Decide what portion of your annual equity pool goes to new hires. vs. ongoing/refresh grants, so it’s maintainable.

What the data shows

Most companies don’t yet have a formal program. When we asked private companies whether they have an evergreen program to grant follow-on refresh options to employees, 52% said no. Another 40% said they refresh options but not through a formal program, and just 8% have a formal evergreen program in place. (N=249)

Among those that do refresh, timing is mostly driven by need rather than a set schedule. Of companies with an evergreen-refresh program, 34% refresh “as needed,” 25% refresh annually, and 22% refresh after financing. A smaller share work on fixed multi-year cycles: 14% every two years, 5% every three years, and 1% every four years. (N=106)

What’s the bottom line? For most companies, refreshes happen “as needed” rather than on a set schedule—which works until it doesn’t. A repeatable framework tied to your option pool keeps refresh grants sustainable as you scale, instead of a scramble every time a key employee’s grant fully vests.

Learn more about Thelander’s Private Company Compensation Data by requesting a free demo here.

Categorised in: Data Drops

This post was written by jthelander