Authored by Darren Smith, this article was originally published by HRO Today on July 14, 2026, and can be accessed here.
When competing for talent, companies often offer equity shares as part of compensation packages. But the gap between the value of an equity grant and what an employee ultimately receives has long been a source of stress. And the compounding uncertainty caused by a global economy, where talent routinely crisscrosses jurisdictions, can inflame employee anxiety. Companies that allow a valuable compensation asset to become a source of stress and frustration put their reputation and ability to retain and recruit at risk.
The problem is not managing complexity. The real challenge is helping employees understand that complexity before it becomes an issue.
All too often, employees are left to figure it out on their own. While companies provide detailed onboarding materials for health insurance, retirement plans, and other benefits, equity compensation is often explained only superficially.
How to reduce uncertainty
Smart companies treat equity not as a niche compensation program administered behind the scenes, but as a core element of the employee experience. Here are a few ways companies can use their equity programs to build trust.
- Focus on the net outcomes. Instead of just telling employees the gross value of their shares (which can be misleading if the stock price drops or taxes are high), companies should clarify the post-tax value. Reconciling the initially promised value with the actual amount deposited into the employee’s bank account helps manage their expectations.
- Simplify the employee experience and overcommunicate. Firms should clearly explain industry jargon like vesting events, exercises, and expirations. Furthermore, they should communicate with employees during the big moments that matter, such as sending reminders a few months before a vesting event or an expiration, rather than relying on employees to remember information they received years prior.
- Establish formal global mobility policies. To support employees who move to different jurisdictions, organizations should proactively design and document consistent rules, such as tax equalization, permanent versus temporary transfer, and re-grant policies. Creating custom rules for every individual leads to unmanageable complexity and errors; instead, companies should standardize policies, so employees know exactly what happens to their equity if they relocate.
- Implement equity onboarding. Just as new or relocating employees receive a formal payroll onboarding that explains exactly how their pay and taxes work, companies need to establish the exact same level of documented procedure and clarity for their equity programs.
Aligning equity and payroll
Most employees understand how to read a pay stub. Companies should use that framework to explain equity. The document should clearly reconcile the promised gross value of the equity with the net amount that actually hits the employee’s bank account after taxes and costs. As a best practice for transparency and continuous education, companies should link payroll and equity information in company emails, treating them as equally important parts of the employee’s total compensation.
Payroll teams are creatures of repetition. On the other hand, equity awards can be exceptions to the normal payroll run. Often, equity files detailing tax withholdings are sent out on time, but local payroll teams fail to apply them properly. This disconnect can lead to compliance and audit issues and surprise tax bills for employees at the end of the year. Companies must bridge this internal gap so payroll can execute the tax and reporting obligations communicated by the equity team.
Closing the expectation gap
Equity grants can either be a source of employee frustration or an important recruiting and retention tool. While companies cannot control the volatility or the market complexity, they can control their communication.