As fast-growing companies refine their compensation strategies to prioritize retention, equity refreshes are becoming an important tool to sustain employee engagement and incentivize long-term commitment.
Equity refreshes are additional equity grants typically given to employees after their initial grants. Usually, companies issue refreshes based on time, such as when initial grants are near vesting, or to coincide with milestones, such as a funding round, product launch, or clinical trial advancement. But as companies adjust their total rewards programs to meet the changing economy and job market, equity refreshes are evolving too.
Read on to learn how companies are structuring their equity refresh programs this year, according to Sequoia’s 2025 Comp and Equity Trends Report.
Trend #1: More Companies Will Shift to Performance-Based Equity Refresh Grants
According to Sequoia’s data, 20% of companies surveyed were planning to shift their refresh grants from time-based vesting to performance-based vesting over the next 12 to 24 months.
As Thanh Nguyen, Sequoia’s head of VC practice explained in our new 2025 Guide to Navigating Total People Investment, which also explores equity trends, the reasons are tied to macroeconomics: “Investors have leverage and higher expectations for their investment companies to be more capital efficient. Performance-based rewards, especially for executive leadership, support these higher expectations. As equity plays into your strategy to get the most of your people investment, performance-based equity refreshes can help ensure the goals of your top execs are aligned to your company’s goals.”
Trend #2: More Small Companies Are Offering Equity Refreshes
When companies are conserving cash, they turn to equity to extend runway. Once mainly used by big companies, equity refreshes are now common across businesses of all sizes — including those with fewer than 100 employees — a clear reflection of a cash-constrained market.
In fact, 79% of companies offer refresh grants to at least some non-executives, and 81% to executives. Equity refreshes are most common at companies with 500 to 999 employees, where nearly all offer them to both executives and non-executives.
Trend #3: Companies Are Awarding Executives Refresh Grants Annually
Initial equity packages help get executives in the door but refresh grants help keep them. With longer timelines to liquidity, more companies are awarding refresh grants annually to retain their leadership. The frequency of annual refreshes increases as companies grow, with 64% of companies between 500 to 999 employees executing an annual cadence.
Trend #4: Equity Refreshes May Be More Frequent, But They’re Smaller
While most companies offer refresh grants, they’re shrinking in size.
In 2023, 48% of executive refresh grants were more than 50% of the size of new hire grants. By later 2024, that number dropped to just 6%.
The same trend applies to non-executives. In 2023, 49% of refresh grants were more than half the size of new hire grants, but by 2024, only 5% reached that level.
Several factors are likely driving this shift. Companies are issuing refreshes more frequently and stretching equity pools over longer periods. Additionally, with a cooler job market, employers have more leverage and don’t need to offer large refresh grants to stay competitive.
Trend #5: Performance-Based Equity Refresh Grants Often Go to Executives
As companies shift to performance-based refreshes, these grants are increasingly awarded to executives, while non-executives typically receive them through promotions.
For executives whose roles are closely tied to company performance, refresh grants align their compensation with long-term success and are tied to key metrics like revenue growth and profitability. In contrast, non-executives typically have less direct accountability for enterprise-level KPIs, making promotion-based refresh grants a more common approach at that level.
Trend #6: Companies Are Using Equity Vehicles More Strategically for Executive Refresh Grants
While equity refreshes for executives saw a slight increase across all equity vehicles between 2023 and 2024, the most significant shift was in performance-based stock, which rose from 9% to 20%, another reflection of the move away from automatic refreshes toward a more strategic performance-aligned approach. This trend is especially pronounced at later-stage companies that have a more mature compensation philosophy and need a stronger return on investment from their equity grants.
Another notable shift is the growing adoption of restricted stock units (RSUs), which are considered a more stable option than stock options. At the same time, stock options are still the dominant equity vehicle for executive and non-executives refreshes. While companies are exploring other forms of equity, the steady use of stock options suggests that many are still relying on familiar tools as they formalize their refresh strategies.
Read the Full Reports
To learn more about this year’s compensation trends and how to build a holistic total rewards strategy, check out 2025 Comp and Equity Trends Report and the 2025 Guide to Navigating Total People Investment.
Build Your Refresh Strategy on Reliable Benchmarking Data
Whether you’re awarding equity refreshes to executives, non-executives, or both, a strong strategy starts with high-quality market data. With so many data sources available to inform your compensation and equity strategy, it’s more important than ever to make sure the data you’re relying on is accurate, up to date, and relevant to your company’s size, stage, and industry. The right benchmarking data helps you understand the talent market and stay competitive, so you can make informed confident decisions.
How Sequoia Can Help
Sequoia’s experienced compensation advisors are ready to support your total reward strategy with high quality and expert guidance. Connect with Sequoia advisor to learn more.
