Employers frequently want to attract new, super-talented management to an existing Company, or potentially worse, have already promised to give one or more trusted and loyal current employees equity as part of their compensation package as soon as the time is right.  Unfortunately, this is easier said than safely done. 

Clearly, equity can be a powerful, seemingly low-cost form of compensation and motivation.  Having your most valued employees vested in something beyond their pay check certainly seems like a fine idea.  If the Company does well, the employee shares in that growth in the form of annual distributions or a buy-out upon death, disability, retirement or other termination of employment.  So, what do I have against such an idea?