Remember when equity was the ultimate perk for investor-backed companies? Not long ago, it was the most prized part of a compensation package. But the past few years — marked by falling valuations, tighter equity pools, and changing employee expectations — have pushed companies to rethink how they structure long-term incentives (LTI). Today’s plans aim to do more than keep employees engaged. They’re also designed to preserve cash and stretch equity.
To see what that looks like in practice, we’ll dive into year-over-year data from Sequoia’s upcoming 2026 Compensation and Equity Trends Report.
Fewer Stock Option-Only Programs
For startups and investor-backed companies, stock options have long been the go-to LTI. If your company took off and went public, the upside could be life changing. Then came 2023. Valuations dropped and many stock options sank underwater. Suddenly, employees were holding equity that didn’t feel like much of a reward.
It’s no surprise our data shows that options-only LTI plans are losing popularity, especially for non-executives. New-hire option-only grants for this group are down 11% since 2024. Refresh grants fell even faster, dropping 14% over the same period.
Companies aren’t walking away from options altogether. They’re scaling back as boards look to protect option pools and finance teams push for predictable costs. The result is smaller grants and a move toward equity vehicles that feel less like a gamble.
RSUs Are Gaining Ground
RSU adoption has been climbing steadily across all employee segments, with the biggest jump in refresh grants for non-executives, up 11% since 2023.
More early-stage companies are rolling out RSU-only programs, something that was almost unheard of a few years ago. RSUs used to be more common at later stages.
Some companies offer RSUs instead of stock options to give employees clearer value, reduce downside because employees don’t have to purchase them, and give finance teams more predictable accounting. That combination makes RSUs an attractive choice for companies managing tighter equity pools.
Refresh Grants Are Smaller
Refresh grants have gotten smaller as companies juggle valuation pressure and the cost of bigger new-hire awards.
In 2025, only 8% of non-executives received a refresh grant equal to half or more of their original new-hire grant — a 42% drop from 2023. Executives saw a similar slide, falling from 48% to just 5%. Most refreshes now come in at less than 30% of the initial grant.
Companies are tightening the reins to stretch equity pools and keep programs sustainable.
Refresh Grants Are Less Frequent
Annual refreshes used to be the norm. Not anymore. Companies are spacing out grants to extend runway and tie awards to longer-term goals.
Annual executive refreshes dropped from 56% in 2023 to 49% in 2026, while three- to four-year cycles grew from 15% to 21%.
Longer refresh cycles help finance teams pace dilution and bring more predictability to equity values.
What This Means for 2026
To recap: Equity programs aren’t disappearing. They’re being redesigned to fit a market where valuations are unpredictable, and equity pools are tight. Stock options still matter, but other equity vehicles are growing more popular. RSUs are gaining ground, refresh grants are smaller and less frequent, and boards are looking for ways to make equity meaningful without putting the company at risk.
Every grant now carries more weight. Companies that succeed will find the right balance between retention, cost control, and performance, while keeping equity programs sustainable for the long haul.
Access More Sequoia Data
To see how your compensation program stacks up in the market, check out more of Sequoia’s insights and reports, including the 2026 Compensation and Equity Trends Report when it becomes available later in January.
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