Equity refresh grants are the annual or periodic equity grants that companies provide to existing employees beyond their original hire grant. They are, at public technology companies, a standard and expected component of total compensation. At private companies, they are negotiable, increasingly common, and in our 2024 data the single most valuable item a senior candidate can negotiate that they typically don’t.
The magnitude of the gap between candidates who negotiate refresh policies and those who don’t, over a 4-year tenure, is striking enough to warrant a dedicated piece. A VP-level professional who joins with a $1.2 million initial equity grant and successfully negotiates a $400,000 per year refresh starting in year 2 realizes, over 4 years, approximately $2.4 million in total equity value. The same professional without the refresh realizes $1.2 million. The $1.2 million difference was the result of asking a question in the final-round negotiation that most candidates don’t ask.
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, 78% of public technology company VP-level offers included documented annual refresh policies; 54% of late-stage private company VP-level offers included documented annual refresh policies; and only 22% of PE-backed portfolio company VP-level offers included documented annual refresh policies. If you’re evaluating a private company offer that doesn’t include a documented refresh, you have 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 is best for the candidate in a declining-stock environment (the refresh maintains value even if shares are worth less). The percentage-of-initial-grant structure is best in a rising-stock environment. Performance-based structures introduce variability that should be evaluated against historical payout rates at the specific company.
Discretionary vs. guaranteed
The most important distinction in refresh policies is between discretionary and guaranteed. A discretionary refresh is one that the company may grant based on annual performance reviews and budgets; a guaranteed refresh is one that the company is contractually obligated to provide if you remain employed and in good standing.
In practice, most refresh policies are described as "target" or "expected" rather than guaranteed. The company retains discretion to reduce or eliminate refreshes in difficult financial periods. This discretion is meaningful: companies that have eliminated discretionary refreshes during financial stress have done so, and employees who had incorporated expected refreshes into their total compensation planning have been adversely affected.
The negotiating target is to get as much of the refresh as possible into a contractual commitment rather than a discretionary expectation. Even if the full amount is discretionary, getting the floor — "the minimum refresh for satisfactory performance will be no less than $X" — in writing provides some 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.