What are equity grants?
Equity grants are awards of company stock, restricted stock, restricted stock units (RSUs) or stock options issued by a company to founders, employees, advisors or directors as compensation. Grants are typically made under a board-approved Equity Incentive Plan and documented in a written grant agreement that includes the number of shares, exercise price, vesting schedule and any acceleration provisions.
From a legal perspective, equity grants must comply with applicable securities laws (U.S. Rule 701, SEC Regulation D, or Turkish SPK communiqués for public companies), corporate authorization requirements, and the relevant tax framework (Section 83(b) elections, ISO holding periods, payroll tax obligations).
References
- Turkish Capital Markets Law No. 6362
- Turkish Capital Markets Board (SPK)
- U.S. Securities and Exchange Commission (SEC)
- 17 CFR — SEC Regulations (eCFR)
- U.S. Internal Revenue Service (IRS)
Granting equity without surprises
Equity grants are where tax law meets retention design. The instrument decides the tax event: real shares now (taxable benefit at grant in many fact patterns), options (taxation typically at exercise or sale depending on regime), RSUs (at vesting), phantom/virtual units (employment income when paid). Türkiye adds a meaningful incentive: the 2021 amendment to the income-tax regime exempts qualifying employer-share benefits in tech startups meeting Industry and Technology Ministry criteria, with clawback mechanics tied to holding periods — making plan design a tax-planning exercise, not just an HR one. The non-negotiables in any plan: board-approved plan documents, individual grant agreements with vesting and leaver terms, cap-table tracking of every promise, and consistency between what offer letters say and what the plan delivers.