Making equity matter: real ownership in uncertain times

This post builds on some of the themes explored in my last blog. Enjoy.

In meetings, inboxes and surreptitious Whatsapp messages, there’s a familiar undertone: people feel unsettled. The world feels twitchy. Life feels tougher than ever. And in the corporate world, a quiet question often floats just beneath the surface of our day-to-day career existence: what am I still doing here?

“To recruit, retain and incentivise” is the go-to justification for launching an equity plan, but it’s often more slogan than strategy. If equity is going to earn its keep, it needs to do more than tick boxes. So what could “retain” actually mean in an equity context? How could equity get close to answering the question: what am I still doing here?

Equity retention re-examined

For equity to get close to being any sort of answer, the idea of “retention” needs to be re-examined. To have genuine impact and psychological salience, equity needs to say:

“You have a stake”.

“You belong here”.

“You are part of where this is going”.

But that only works if equity is designed to mean something.

Too often, what gets called “ownership” is little more than theatre; think phantom shares, opaque waterfalls or preference-heavy capital structures dressed up as incentives. 

If you need a tax note, a spreadsheet model and a stiff drink just to understand your equity package, something’s gone wrong.

And the problem isn’t just structural, it’s psychological. Deferred rewards only work when people believe the future will arrive. Right now, that belief is fragile. Inflation is eating real pay. Valuations are not going up as quickly as people hoped. Exits are drifting right. If the upside is too remote or buried under too many conditions, employees disengage.

So what helps?

Clarity over cleverness
A well-designed equity plan with clear value and visible mechanics will do more to retain talent than a complex structure that requires legal translation. People don’t need a prospectus, they need a reason to care.

Realistic economics
If the equity pool only delivers value above a 3x return after £100m of preference capital has been cleared, be honest. Don’t pitch it as “meaningful” when it’s a rounding error with vesting conditions.

Wider access
Share plans that touch only the top 1% of the business are not incentive structures, they’re perks. Real alignment means putting ownership in more hands, not just senior ones.

Cash isn’t the enemy
Deferral has its place but liquidity matters. If you're handing out notional upside in a high-interest-rate world with no visibility on exit, don’t be surprised if people look elsewhere.

Time it well, explain it clearly
Equity needs air. Don’t launch mid-restructure or bury it in HR comms. Link it to what people can control. Communicate early. Repeat often. Make it real.

And don’t forget the bigger picture: plans that work for employees tend to work for investors too. Alignment only happens when both parties understand the upside and believe it’s achievable.

Concluding thoughts

Equity isn't magical or a silver bullet. But in a dislocated world, it can provide ballast. It can anchor people to something bigger than their job title. Done well, it builds loyalty, trust and belief. Done badly, it’s just one more promise they’ve learned not to trust.

At Burges Salmon, we help clients design equity incentives that hold up under scrutiny, make sense to participants and deliver value when it matters most. No theater, just effective, commercial alignment.