Finance Seminar Mindy Xiaolan

The paper studies why firms differ in granting equity beyond top executives. Using S&P 1500 data, it shows that while equity pay is widespread, its breadth varies sharply and persists over time. These differences reflect initial compensation choices, financial constraints, and peer effects. Firms with broader equity pay are typically younger, actively manage grants, and grow faster. The study further shows that equity compensation is closely linked to capital structure: firms use it both to incentivize employees and share risk.

Equity pay is a key driver of firm dynamics and inequality—linking incentives, financing, and labor outcomes beyond the C-suite.