Designing a private company equity plan requires five key steps to ensure success. First, assemble a cross-functional team including finance, HR, legal, and the board to align on goals and compliance. Next, determine eligibility—whether to adopt a broad-based plan that fosters ownership culture or an executive-only plan that minimizes administrative burden. Establishing the right equity percentage depends on company size, industry norms, and exit strategies, with benchmarks ranging from 10% for executive plans to 12% for broad-based programs. Choosing award types—stock options, restricted stock, or phantom shares—shapes employee perception and tax treatment. Finally, managing the plan with scalable software instead of spreadsheets ensures accuracy, compliance, and long-term growth.

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