Equity compensation plans aren’t just an employee perk—they’re central to corporate governance, executive pay, and investor relations. Morgan Stanley reports that 76% of companies now offer them, making these plans increasingly popular in investor communications and annual general meetings (AGMs).
While 84% of shareholders support equity compensation plans (The Journal of Accounting Research), approval isn’t guaranteed. Investors, proxy advisors, and institutional firms closely scrutinize these plans, making your role as an IR professional critical.
Clear communication through regulatory filings and press releases builds trust, addresses concerns early, and reinforces shareholder confidence before and after AGMs.
Types of Equity Compensation Plans Explained
Not all equity-based plans work the same way. Before we explore how IR professionals leverage equity compensation in investor relations, here’s a quick breakdown of how these plans differ.
Plan Type | How it Works? |
Equity Compensation Plans (Stock Options, RSUs, PSUs, and Other Share-Based Awards) | Employees receive stock-based incentives (not purchased) as part of their pay package. Plans vest over time or based on performance. Best for executives, key employees, and high performers. |
Employee Share Purchase Plans (ESPPs) | Employees buy company shares through payroll deductions, often with a company match or discount. Broadly available to all employees and encourages stock ownership. |
Employee Stock Ownership Plans (ESOPs) | A retirement benefit plan where the company contributes shares, usually held in a trust. Employees receive ownership over time. Best for long-term employees and succession planning. |
Managing equity compensation plans goes beyond granting shares—it requires compliance, record-keeping, and clear disclosure. Many companies struggle with tracking awards, handling tax complexities, and meeting disclosure requirements.
Why Equity Compensation Plans Matter in Investor Relations
Equity compensation plans align executive and employee incentives with shareholder interests. Institutional investors, proxy advisors, and shareholders scrutinize these plans, especially during AGMs, where they vote on executive pay and governance.
A Harvard Law School analysis of the 2024 proxy season found that 92% of S&P 500 and 88% of Russell 3000 companies received shareholder approval for their equity plans.
However, Institutional Shareholder Services (ISS) plays a major role—say-on-pay proposals with a negative ISS recommendation saw support drop by 27% (S&P 500) and 23% (Russell 3000). This highlights the need for clear communication and proactive investor engagement.
In Canada, Glass Lewis also influences equity plan votes. For 2025, they’re flagging misalignment between executive stock awards and company performance and may recommend voting against plans that lack transparency.
Why Equity Plans Matter for IR Pros
As an IR pro, you need to show investors how equity plans create value and align with shareholder expectations. Here’s why they matter:
Align Pay with Performance – Investors want to see employee compensation (including executive pay) tied to long-term value creation and measurable performance goals.
Attract & Retain Top Talent – Strong equity plans help retain key employees and leadership, ensuring stability and reducing turnover risk.
Ensure Transparency & Governance – Investors closely scrutinize equity plans, so clear IR communication through press releases and filings builds trust and reinforces accountability.
Boost Shareholder Confidence – Well-structured equity plans signal that leadership is committed to long-term growth, helping to maintain strong investor support.
Now, let’s explore how IR pros leverage these plans and press releases to maximize AGM success.
1. Strengthen Shareholder Support with Pre-AGM Press Releases on Equity Compensation Plans
A well-timed investor announcement before the shareholder meeting ensures investors see the value of your equity compensation plan. Investors want to know how the plan benefits the company, aligns executive pay with performance, and supports long-term shareholder value.
By shaping the conversation early, you proactively address concerns, reduce opposition, and improve voting outcomes.
How IR Pros Use Press Releases to Build Shareholder Confidence Ahead of the AGM:
Clearly explain how the plan ties executive pay to performance.
Provide investor-friendly summaries in proxy statements, IR materials, and pre-AGM Q&A sessions.
Use press releases to proactively communicate key equity plan updates before voting.
In the following example, Saturn Oil & Gas proactively discloses its 2025 equity plan adjustments, reassuring investors before the shareholder meeting.
Press Release Example:
2. Proactively Manage Proxy Firms & Institutional Investors with Equity Plan Press Releases
Shareholder advisory firms and institutional investors have significant influence over your AGM vote. If they flag concerns—such as excessive share dilution or unclear performance metrics—you risk opposition from key stakeholders. Clear, proactive communication is critical.
Addressing proxy concerns early reduces pushback, strengthens governance credibility, and increases AGM support.
How IR Pros Use Press Releases to Address Proxy Concerns & Strengthen AGM Investor Support:
Clearly show how equity plans drive long-term shareholder value.
Justify new share grants with a focus on dilution control and business strategy.
Publish a press release detailing equity plan changes and incorporating proxy firm recommendations to address investor concerns and strengthen support.
In the following example, EMX Royalty disclosed stock option and RSU grants, ensuring transparency and aligning executive incentives with performance goals.
Press Release Example:
3. Reinforce Shareholder Confidence with Post-AGM Voting Results Press Releases
After the AGM, investors expect full transparency. Whether the plan passed easily or faced resistance, it's up to you to shape the post-AGM message.
Clear regulatory disclosures on voting results, concerns, and next steps reassure investors and prevents market uncertainty.
How IR Pros Use Press Releases to Maintain Investor Trust Post-AGM:
Provide voting results and highlight approval rates in a clear, investor-friendly format.
Address major shareholder concerns to prevent lingering uncertainty.
Reinforce how the equity plan aligns leadership with long-term business goals.
In the following example, Awalé Resources disclosed AGM voting results and shareholder-approved equity plan updates, reinforcing transparency and governance.
Press Release Example:
To maximize AGM success, you need to time your equity plan press releases strategically. The visual below outlines the key announcements you should make at each stage of the process.
4. Maintain Compliance & Transparency with Equity Plan Grants & Press Releases
Managing equity plans doesn’t stop after the AGM. Ongoing updates—new grants, modifications, and disclosures—must be communicated to maintain investor trust and avoid surprises.
Consistent updates on RSUs, stock options, and performance-based awards keep shareholders informed and engaged.
How IR Pros Use Press Releases to Ensure Compliance & Investor Confidence:
Clearly disclose new equity grants and vesting schedules to maintain transparency.
Ensure timely regulatory filings (SEDAR+, EDGAR) and press releases for material plan updates to maintain compliance.
💡Pro Tip: Well-managed incentive plans build investor confidence. TSX Trust’s Equity Plan Solutions simplify administration and keep you compliant. |
In the following press release examples, PetroTal reported AGM voting results and PSU grants tied to dividends for transparency, while BTCS highlighted its leadership’s exchange of RSUs for restricted stock as a commitment to market cap growth.
Press Release Examples:
PetroTal Announces Q4 2024 Dividend Payment & Grant of Performance Share Units for Dividend Equivalents
BTCS Inc. Leadership Bets Big on Market Cap Growth-Exchanges RSUs for Restricted Stock
5. Use Press Releases to Strengthen Long-Term Shareholder Relations & Equity Plan Transparency
Equity compensation plans aren’t just about AGM votes—ongoing communication helps investors see how they create long-term value.
Regular updates in earnings calls, reports, and press releases keep investors aligned and reduce resistance to future plan renewals.
How IR Pros Use Press Releases to Strengthen Long-Term Support:
Regularly update investors on equity plan performance in earnings reports.
Use press releases to reinforce how executive incentives align with shareholder value.
Maintain consistent communication throughout the year to prevent last-minute AGM pushback.
In the following example, Fuerte Metals announced long-term incentive grants, detailing stock options and RSU vesting to keep investors informed.
Press Release Example:
Equity compensation plans are a critical IR tool. Managing them effectively—through clear disclosures, well-timed press releases, and strong plan administration—strengthens shareholder trust, governance, and AGM outcomes.
Ready to enhance your IR strategy?
Simplify equity plan management with TSX Trust and keep investors informed with TMX Newsfile’s press release distribution and regulatory filing solutions.
