> ## Documentation Index
> Fetch the complete documentation index at: https://docs.equa.cc/llms.txt
> Use this file to discover all available pages before exploring further.

# ESOP Administration

> How to create equity incentive plans, option pools, grant options, and manage vesting schedules in Equa

# ESOP Administration

The ESOP (Employee Stock Option Plan) module helps you create and manage equity incentive plans for your team. From board-approved plans to individual option grants with vesting schedules, Equa handles the full lifecycle of equity compensation.

## Prerequisites

* Active Equa account
* An organization with at least one security type defined
* `editIncentivePlan` permission to manage plans; `viewIncentivePlan` to view

## Understanding ESOP in Equa

The ESOP structure has four layers:

1. **Plans** — Board-approved equity incentive plans that define the overall framework
2. **Pools** — Option pools allocated from a plan, tied to a specific security type
3. **Options** — Individual option grants given to team members from a pool
4. **Vesting schedules** — Rules that determine when granted options become exercisable

## Creating an Equity Incentive Plan

### Step 1: Navigate to ESOP

From your organization sidebar, click **ESOP > Plans**.

### Step 2: Create a New Plan

Click **New Plan** and fill in:

* **Plan name** — A descriptive name (e.g., "2026 Equity Incentive Plan")
* **Board approval date** — The date your board approved the plan
* **Term (years)** — How long the plan will remain active (typically 10 years)
* **Approved equities** — The equity types and amounts the board authorized
* **Board approval document** (optional) — Upload the board resolution
* **Incentive plan document** (optional) — Upload the plan document itself

### Step 3: Attach Securities and Vesting Schedules

After creating the plan, you can link specific security types and default vesting schedules to it.

### Step 4: Save the Plan

Click **Save**. The plan is now ready for pool allocation.

## Creating an Option Pool

### Step 1: Navigate to Pools

From the ESOP section, click **Pools**.

### Step 2: Create a New Pool

Click **New Pool** and fill in:

* **Pool name** — e.g., "Engineering Pool"
* **Security type** — The share class these options will convert into
* **Total shares** — Number of shares allocated to this pool
* **Price per share** — The strike (exercise) price
* **Board approval date** — When the board approved this pool
* **Default vesting schedule** (optional) — Automatically applied to new grants from this pool

### Step 3: Save the Pool

Click **Save**. The pool's available shares equal the total allocation minus any granted options.

## Granting Options

### Step 1: Navigate to Options

From the ESOP section, click **Options**.

### Step 2: Create a New Grant

Click **New Grant** and fill in:

* **Team member** — Select the recipient from your members list
* **Security type** — The share class
* **Number of options** — How many options to grant
* **Start date** — When vesting begins
* **Vesting schedule** — Select a continuous or discrete schedule
* **Legend** (optional) — Restriction text for the grant
* **Note** (optional) — Any additional notes about the grant

### Step 3: Save the Grant

Click **Save**. The system validates that the grant does not exceed the pool's remaining capacity.

## Common Tasks

### Creating a Continuous Vesting Schedule

A continuous schedule vests shares over time at regular intervals.

1. Navigate to **ESOP > Vesting Schedules**
2. Click **New Schedule > Continuous**
3. Fill in:
   * **Name** — e.g., "4-Year Monthly with 1-Year Cliff"
   * **Duration (months)** — Total vesting period (e.g., 48)
   * **Frequency (months)** — How often shares vest (e.g., 1 for monthly)
   * **Cliff (months)** — Initial waiting period (e.g., 12)
   * **Cliff amount** — Shares or percentage that vest at the cliff
   * **Vests on** — Day of the month when vesting occurs
4. Click **Save**

### Creating a Discrete Vesting Schedule

A discrete schedule vests on specific dates with specific amounts.

1. Navigate to **ESOP > Vesting Schedules**
2. Click **New Schedule > Discrete**
3. Fill in:
   * **Name** — e.g., "Milestone-Based Vesting"
   * **Value type** — Absolute shares or percentages
   * **Events** — Add one or more vesting events, each with a date and amount
4. Click **Save**

### Exercising Options

When a team member's options have vested, they can exercise them to convert into actual shares.

1. Open the option grant from **ESOP > Options**
2. Click **Exercise**
3. Enter the number of shares to exercise (cannot exceed vested but unexercised shares)
4. Confirm the exercise

The exercised shares are converted into a shareholding on the cap table.

### Viewing the Vesting Timeline

Each option grant includes a visual timeline that shows:

* The cliff period
* Periodic vesting events
* How many options have vested to date
* How many remain unvested

Open any option grant and look for the **Vesting Timeline** section.

## Tips

<Tip>
  A plan must have a board approval date before you can grant any options under it. Make sure to record this date accurately — it is part of the legal audit trail.
</Tip>

<Tip>
  Pool shares cannot exceed the plan's approved equity amount for the associated security type. If you need more capacity, update the plan's approved equities first (which may require a new board resolution).
</Tip>

<Tip>
  The most common vesting schedule for startups is a 4-year monthly vest with a 1-year cliff. This means 25% vests after the first year, then the remaining 75% vests monthly over the next 3 years.
</Tip>

## Design References

Design-system source for this guide: [ESOP screenshot gallery](/architecture/design-system/screenshots/esop) and [EquaTable](/architecture/design-system/components/equa-table), [EquaDatePicker](/architecture/design-system/components/equa-date-picker), [EquaProgress](/architecture/design-system/components/equa-progress), [EquaModal](/architecture/design-system/components/equa-modal).

## Troubleshooting

<AccordionGroup>
  <Accordion title="I cannot grant options: pool capacity exceeded">
    **Cause:** The grant amount exceeds the remaining unallocated shares in the pool.

    **Solution:** Either reduce the grant size, or create a new pool with additional capacity (requires board approval).
  </Accordion>

  <Accordion title="Exercise failed: insufficient vested shares">
    **Cause:** The team member is trying to exercise more options than have vested.

    **Solution:** Check the vesting timeline to see how many shares have vested. The exercise amount cannot exceed the vested-but-unexercised count.
  </Accordion>

  <Accordion title="Vesting start date is rejected">
    **Cause:** The vesting start date is before the plan's board approval date.

    **Solution:** Set the vesting start date to be on or after the plan's board approval date.
  </Accordion>

  <Accordion title="I do not see the ESOP section">
    **Cause:** You may not have the `viewIncentivePlan` or `editIncentivePlan` permission.

    **Solution:** Ask your organization admin to assign you the appropriate ESOP permissions.
  </Accordion>
</AccordionGroup>

## Related

* [Managing Your Cap Table](/guides/managing-your-cap-table)
* [Issuing Equity](/guides/issuing-equity)
* [Reports and Analytics](/guides/reports-and-analytics)
* [ESOP Specification](/specs/004-esop/spec)