Refresh Grant
Additional equity granted to existing employees, usually annually, to maintain retention incentives.
Definition
A refresh grant is a new equity award given to current employees on top of their original hire grant. Refresh grants are typically awarded annually during performance reviews and vest over 4 years from the new grant date. They serve to retain employees whose original grants are substantially vested and to reward strong performers. The size varies but is usually smaller than the initial hire grant.
Why it matters
Refresh grants are crucial for your long-term compensation. As your initial grant vests, refresh grants prevent your equity compensation from dropping to zero. Strong performers at growing companies can accumulate significant equity through stacked refresh grants.
Example
You received 40,000 options at hire. After your second year, you get a 10,000-option refresh grant. After year three, another 12,000. By year four, you have overlapping vesting from three grants, smoothing your equity income.