An equity refresh grant is the annual or periodic equity award a company issues to current employees on top of their original hire grant. At public technology companies, refreshes are a standard, expected element of total compensation. At private companies, they are negotiable, increasingly prevalent, and in our 2024 placement data represent the single highest-value negotiation point that senior candidates routinely leave on the table.
The gap between candidates who negotiate refresh policies and those who do not is large enough to justify a dedicated analysis. A VP-level professional who joins with a $1.14 million initial equity grant and secures a $380,000 per year refresh beginning in year two realizes, over four years, roughly $2.28 million in total equity value. The same professional without the refresh realizes $1.14 million. The $1.14 million difference traces back to a single question posed during the final negotiation round that most candidates never raise.
Which companies grant refreshes
At public technology companies, equity refresh grants are essentially universal at VP and above. The specific amounts and structures vary but the existence of annual refreshes is assumed by both parties in the negotiation. At late-stage private SaaS and AI-native companies, annual refreshes are now common enough that candidates should request documentation of the policy rather than accepting a verbal commitment.
At PE-backed portfolio companies, refreshes are uncommon in the traditional sense but are sometimes structured into management incentive plans as milestone-based additional vesting events rather than time-based annual grants. At family offices and smaller private companies, refreshes are negotiated individually and may be discretionary.
In our 2024 placement data, 74% of public technology company VP-level offers included documented annual refresh policies; 51% of late-stage private company VP-level offers included documented refresh policies; and only 21% of PE-backed portfolio company VP-level offers included documented refresh policies. If you are evaluating a private company offer that lacks a documented refresh, there is meaningful room to negotiate.
How refreshes are sized
At public companies, refresh grants are typically sized as a percentage of base salary or as a percentage of the initial grant value, adjusted for stock price at the time of grant. Common structures:
- Percentage of initial grant: Annual refresh = 25% to 40% of initial grant value, adjusted for current stock price
- Fixed dollar amount: Annual refresh = $X per year, documented in offer letter
- Performance-based: Annual refresh determined by annual performance rating, with typical ranges documented
- Market benchmarking: Annual refresh sized to maintain target total compensation relative to a peer benchmark
The fixed-dollar structure favors the candidate when the stock price is falling, because the refresh retains its value regardless of share-price movement. The percentage-of-initial-grant structure favors the candidate in a rising market. Performance-based structures introduce variability that should be weighed against the company’s historical payout track record before accepting.
Discretionary vs. guaranteed
The most consequential distinction in any refresh policy is whether it is discretionary or guaranteed. A discretionary refresh is one the company may issue based on annual performance evaluations and budget availability; a guaranteed refresh is one the company is contractually bound to deliver as long as you remain employed and in good standing.
In practice, most refresh policies are framed as "target" or "expected" rather than guaranteed. The company preserves the right to reduce or eliminate refreshes during periods of financial pressure. That discretion is not hypothetical: companies that faced budget constraints have exercised it, and employees who had factored expected refreshes into their total compensation planning were materially affected.
The negotiating objective is to convert as much of the refresh as possible from a discretionary expectation into a contractual commitment. Even if the full amount remains discretionary, securing a documented floor — "the minimum refresh for satisfactory performance will be no less than $X" — provides meaningful downside protection.
How to negotiate the policy
Three specific language framings that work well in refresh policy negotiations:
"Can you document the refresh policy in the offer letter? I want to understand what I should expect in years 2 through 4 so I can make an informed decision." This is a request for transparency, not an adversarial demand.
"I understand the refresh will be performance-based. What is the typical refresh for a VP who hits their performance targets? I want to understand the total compensation picture assuming normal execution." This quantifies the expected value without challenging the performance-based structure.
"Given the initial grant is sized at $X, can we establish a minimum annual refresh of $Y that applies in years 2 through 4? I’m comfortable with the total being performance-adjusted upward; I want to understand the floor." This is the negotiation ask that explicitly seeks a guaranteed minimum.
For context on how equity refresh policies have evolved across company types, our VP Engineering compensation report contains the most detailed current picture, and our earlier equity vesting piece covers the broader equity negotiation landscape.
Private company refresh nuances
At private companies, refresh grants have a specific complication that public companies don't share: the 409A valuation determines the tax and economic value of each grant, and 409As are updated irregularly — typically every 12 months unless a material event (a new funding round, an acquisition offer) triggers an interim update. This means that a "refresh grant" at a private company in the same dollar amount as a prior grant may actually represent significantly different equity depending on when it's issued relative to the most recent 409A.
The practical implication: when negotiating an annual refresh policy at a private company, get the refresh specified as a percentage of fully diluted rather than a fixed dollar amount. A guarantee of "$400,000 per year in equity" at a company whose 409A will be revised upward at its next funding round is a guarantee of an uncertain number of shares. A guarantee of "0.05% of fully diluted per year" is a guarantee with a known relationship to the company's actual equity structure regardless of when the 409A is updated.
Additionally, refresh grants at private companies are typically issued on standard 4-year vesting from the new grant date. This means that a refresh grant received in year 2 of your employment has a vesting cliff in year 3 (one year after the grant) and continues vesting until year 6 of your employment. The cumulative vesting structure can create meaningful retention incentives — you're always inside multiple active vesting windows — but it also means the value of refreshes is heavily back-weighted relative to what a naive reading of the annual grant value suggests.
Negotiating each refresh cycle, not just the initial policy
Even when you've successfully negotiated a documented refresh policy, each annual refresh cycle is its own negotiating moment. The policy creates a floor; the specific grant can be negotiated above it. Senior professionals who treat each annual refresh as a new conversation — who come prepared with external market data, their specific contribution record, and a specific ask — consistently receive above-floor refreshes more often than those who passively accept whatever HR proposes.
The annual refresh conversation is also the natural moment to renegotiate other equity terms. If the company has changed significantly since your original grant — grown more quickly, raised a new round at a higher valuation, changed its IPO timeline — the original equity economics may no longer reflect the current risk-reward balance of your position. The annual refresh conversation is the most natural entry point for a broader discussion about whether the current equity structure appropriately reflects your contribution and the company's trajectory. For context on how equity refresh policies compare to overall compensation at VP level, see our VP Engineering compensation report.