Equity refresh grants: the raise inside your stock comp

Employees with stock compensation often obsess over their initial grant and ignore the mechanism that actually determines their long-term equity income: the refresh grant. An initial four-year grant feels generous, but it vests and runs out — and without refreshers, your total compensation can quietly fall off a cliff in year four or five even as your salary holds steady. Understanding how refreshes work is the difference between rising equity income and a silent pay cut you didn't negotiate.

Why the initial grant runs out

A typical initial equity grant vests over four years. In years one through four you receive a slice each year on top of your salary. But if nothing new is granted, year five delivers zero equity — your total comp drops by the entire annual equity value overnight. This is the 'equity cliff' or 'vesting cliff' problem, and it catches people who never modeled their equity as a stream with an expiration date.

How refreshers work

• Annual refreshers: many companies grant a new (usually smaller) equity award each year, layered on top of the initial grant, so vesting overlaps and income stays smooth.
• Performance/promotion refreshers: some grants are tied to strong reviews or promotions rather than an automatic annual schedule.
• Evergreen vs. cliff-y policies: companies with generous refresh cultures keep total comp rising; those without leave employees to renegotiate or watch equity income fall.
• The stacking effect: because each refresh also vests over years, several years of overlapping grants can make equity income grow rather than plateau — if the refreshes keep coming.

Negotiating and timing refreshers

Refreshers are negotiable, especially around performance reviews and promotions, but the leverage is highest before the cliff, not after. Raise it proactively: 'My initial grant fully vests next year — I'd like to discuss a refresh to keep my total compensation on track.' Bring the same evidence you'd use for a raise. Because equity is a large share of total comp at many companies, a strong refresh can be worth more than the salary raise you'd otherwise focus on.

1. 1
   Build the vest calendar

   List every grant, vest date, and share count, and project total equity income by year. Find the cliff year.

2. 2
   Learn the refresh policy

   Ask whether refreshers are automatic annual, performance-based, or ad hoc — it determines how much you must drive the conversation.

3. 3
   Raise it before the cliff

   Negotiate a refresh a year ahead of your initial grant running out, when your leverage and your total comp are both still intact.

4. 4
   Value refreshers when comparing offers

   Two offers with identical initial grants can diverge hugely based on refresh culture — ask about it in every equity comparison.

The bottom line

The initial grant gets the attention, but the refresh grant decides your equity income for the long run. Model your equity as a dated stream so you can see the cliff where your first grant runs out, learn whether your company refreshes automatically or on request, and negotiate the refresh a year ahead while your leverage is highest. Ignored, the cliff is a silent 20-30% pay cut in year five. Anticipated, refreshers turn equity from a one-time bonus into a rising, renewable stream — which is what it was always meant to be.