Equity incentives such as stock option plans allow staff to purchase shares in a company at a price that is set at the time the option is awarded. They are under no obligation to exercise that option, but should the stock go up, they could buy the stock at the cheaper price and immediately sell it for the current value once their options have vested.

More companies have found stock options to be a useful incentive. In addition, many law firms are implementing equity incentive programs in which all full-time employees are awarded shares of the firm (similar to attorneys who are partners). It’s a good idea to make equity incentive plans just one of a variety of perks offered as part of a balanced benefits and compensation package.