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ESOP Administration

The ESOP (Employee Stock Option Plan) module helps you create and manage equity incentive plans for your team. From board-approved plans to individual option grants with vesting schedules, Equa handles the full lifecycle of equity compensation.

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Prerequisites

  • Active Equa account
  • An organization with at least one security type defined
  • editIncentivePlan permission to manage plans; viewIncentivePlan to view

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Understanding ESOP in Equa

The ESOP structure has four layers:
  1. Plans — Board-approved equity incentive plans that define the overall framework
  2. Pools — Option pools allocated from a plan, tied to a specific security type
  3. Options — Individual option grants given to team members from a pool
  4. Vesting schedules — Rules that determine when granted options become exercisable

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Creating an Equity Incentive Plan

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Step 1: Navigate to ESOP

From your organization sidebar, click ESOP > Plans.

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Step 2: Create a New Plan

Click New Plan and fill in:
  • Plan name — A descriptive name (e.g., “2026 Equity Incentive Plan”)
  • Board approval date — The date your board approved the plan
  • Term (years) — How long the plan will remain active (typically 10 years)
  • Approved equities — The equity types and amounts the board authorized
  • Board approval document (optional) — Upload the board resolution
  • Incentive plan document (optional) — Upload the plan document itself

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Step 3: Attach Securities and Vesting Schedules

After creating the plan, you can link specific security types and default vesting schedules to it.

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Step 4: Save the Plan

Click Save. The plan is now ready for pool allocation.

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Creating an Option Pool

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Step 1: Navigate to Pools

From the ESOP section, click Pools.

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Step 2: Create a New Pool

Click New Pool and fill in:
  • Pool name — e.g., “Engineering Pool”
  • Security type — The share class these options will convert into
  • Total shares — Number of shares allocated to this pool
  • Price per share — The strike (exercise) price
  • Board approval date — When the board approved this pool
  • Default vesting schedule (optional) — Automatically applied to new grants from this pool

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Step 3: Save the Pool

Click Save. The pool’s available shares equal the total allocation minus any granted options.

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Granting Options

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Step 1: Navigate to Options

From the ESOP section, click Options.

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Step 2: Create a New Grant

Click New Grant and fill in:
  • Team member — Select the recipient from your members list
  • Security type — The share class
  • Number of options — How many options to grant
  • Start date — When vesting begins
  • Vesting schedule — Select a continuous or discrete schedule
  • Legend (optional) — Restriction text for the grant
  • Note (optional) — Any additional notes about the grant

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Step 3: Save the Grant

Click Save. The system validates that the grant does not exceed the pool’s remaining capacity.

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Common Tasks

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Creating a Continuous Vesting Schedule

A continuous schedule vests shares over time at regular intervals.
  1. Navigate to ESOP > Vesting Schedules
  2. Click New Schedule > Continuous
  3. Fill in:
    • Name — e.g., “4-Year Monthly with 1-Year Cliff”
    • Duration (months) — Total vesting period (e.g., 48)
    • Frequency (months) — How often shares vest (e.g., 1 for monthly)
    • Cliff (months) — Initial waiting period (e.g., 12)
    • Cliff amount — Shares or percentage that vest at the cliff
    • Vests on — Day of the month when vesting occurs
  4. Click Save

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Creating a Discrete Vesting Schedule

A discrete schedule vests on specific dates with specific amounts.
  1. Navigate to ESOP > Vesting Schedules
  2. Click New Schedule > Discrete
  3. Fill in:
    • Name — e.g., “Milestone-Based Vesting”
    • Value type — Absolute shares or percentages
    • Events — Add one or more vesting events, each with a date and amount
  4. Click Save

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Exercising Options

When a team member’s options have vested, they can exercise them to convert into actual shares.
  1. Open the option grant from ESOP > Options
  2. Click Exercise
  3. Enter the number of shares to exercise (cannot exceed vested but unexercised shares)
  4. Confirm the exercise
The exercised shares are converted into a shareholding on the cap table.

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Viewing the Vesting Timeline

Each option grant includes a visual timeline that shows:
  • The cliff period
  • Periodic vesting events
  • How many options have vested to date
  • How many remain unvested
Open any option grant and look for the Vesting Timeline section.

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Tips

A plan must have a board approval date before you can grant any options under it. Make sure to record this date accurately — it is part of the legal audit trail.
Pool shares cannot exceed the plan’s approved equity amount for the associated security type. If you need more capacity, update the plan’s approved equities first (which may require a new board resolution).
The most common vesting schedule for startups is a 4-year monthly vest with a 1-year cliff. This means 25% vests after the first year, then the remaining 75% vests monthly over the next 3 years.

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Troubleshooting

Cause: The grant amount exceeds the remaining unallocated shares in the pool.Solution: Either reduce the grant size, or create a new pool with additional capacity (requires board approval).
Cause: The team member is trying to exercise more options than have vested.Solution: Check the vesting timeline to see how many shares have vested. The exercise amount cannot exceed the vested-but-unexercised count.
Cause: The vesting start date is before the plan’s board approval date.Solution: Set the vesting start date to be on or after the plan’s board approval date.
Cause: You may not have the viewIncentivePlan or editIncentivePlan permission.Solution: Ask your organization admin to assign you the appropriate ESOP permissions.