How to Create a Refresher Grant System: Refresher Grants

A refresher grant system is a documented, repeatable programme for awarding additional equity to employees after their initial new-hire grant. Done well, it is one of the sharpest retention tools available to a private company. Done ad-hoc, it burns through the option pool, rewards the wrong behaviour, and erodes employee trust faster than no programme at all. This guide walks through the build, end to end.

Course objectives

By the end of this guide, you will be able to:

• Decide whether your company is ready to introduce a systematic refresher programme.
• Layer in promotion, performance, and tenure grants in the right sequence and at the right stage.
• Design the vesting, sizing, cadence, and eligibility rules that make a refresher programme defensible.
• Model the multi-year dilution cost before you commit.
• Communicate, govern, and iterate the programme so it actually moves retention.
  
  

Course syllabus

1. What a refresher grant system is, and why ad-hoc refreshers fail
2. Before you start: three prerequisites
3. The build sequence: promotion, performance, tenure
4. Promotion grants: the easiest layer to operationalise
5. Performance grants: adding the layer without breaking the system
6. Tenure grants: the most expensive layer and when to add it
7. Vesting design for refreshers: layered vs boxcar
8. Eligibility: who qualifies, who does not
9. Sizing: anchoring refreshers to the new-hire grid
10. Cadence: tying refreshers to the performance review cycle
11. Budget and dilution: modelling the multi-year cost
12. Communication: making refreshers feel earned, not entitled
13. Governance: board approval, documentation, exception handling
14. Common pitfalls and how to avoid them
15. Course recap: ten things to remember
16. Frequently asked questions

Module 1: What a refresher grant system is, and why ad-hoc refreshers fail

A refresher grant is any equity grant a company makes to an existing employee after their initial new-hire grant. A refresher grant system is the framework that decides who gets one, when, why, how big it is, and how it vests. The first is a transaction. The second is a policy.

Most companies start with the first and never make it to the second. A founder agrees to a one-off grant for a star engineer to keep them from leaving. Six months later, a head of sales asks for the same treatment. A year later, the conversation has happened a dozen times, no two grants are sized the same way, and the people-team has spent more energy negotiating individual exceptions than designing the programme.

Three failure modes recur:

The first is uneven sizing. Without anchored rules, every grant becomes a negotiation, and the loudest employees end up with the largest awards. The pattern is invisible until pay-transparency rules or simple internal comparison surface it, at which point the cost of unwinding the inconsistency is significant.

The second is uneven coverage. Without an eligibility framework, refreshers cluster around the people who happen to ask. Strong performers who do not raise their hand are missed. Quiet retention risks become loud retention crises.

The third is uneven cost. Without a budget and a forecast, the option pool runs out faster than the model anticipated, and the next pool top-up arrives at a worse moment than it needed to.

A refresher grant system replaces all three with rules. It defines triggers (promotion, performance review outcome, end of vesting), defines sizing (a percentage of the new-hire grant at the relevant level), defines vesting and cliff conventions, defines eligibility, defines the cadence, and defines the budget. Any single grant can still be a judgement call. The programme as a whole is a system.

Key takeaway: Ad-hoc refreshers are a cost without a strategy. A systematic programme replaces individual negotiations with rules, anchors, and a multi-year budget.

Module 2: Before you start, three prerequisites

A refresher grant programme cannot do its job in isolation. Three things have to be in place first, or the programme will compound problems rather than solve them.

The first is a competitive new-hire grant grid. If new joiners are under-granted at the door, no refresher programme will fix it. The maths runs the wrong way: a series of small refreshers cannot recover the gap with the market that a properly sized initial grant would have closed. Get the front-door grants right first, then layer refreshers on top.

The second is a leveling framework. Refresher grants should be sized as a function of the new-hire grant at the recipient's level. That assumes there is a level. Without a documented leveling framework, every grant becomes an argument about whether the recipient is operating at the level being implied by the grant size. With one, the conversation moves from "how much" to "what level" and back to clearly anchored numbers.

The third is the operational discipline to track grants as a programme, not a series of one-off events. By the time a refresher programme is worth designing, the company should be on a cap-table platform with reliable vesting and termination data. Spreadsheets continue to work for very small companies. Refresher programmes do not.

A useful checklist, before any policy work begins:

• New-hire grants are benchmarked and competitive at the level the company is hiring at.
• A leveling framework is documented and applied consistently across departments.
• Performance review outcomes are calibrated, with managers aligned on what each rating means.
• A cap-table platform tracks all grants, vesting, and terminations.
• Equity burn rate and pool utilisation are reported to the board on a recurring basis.

If two or more of these are missing, the programme is premature. Build them first, then come back to refreshers.

Key takeaway: Refresher programmes work only when the foundations are in place. Competitive new-hire grants, a leveling framework, and reliable grant data are the three non-negotiables.

Module 3: The build sequence, promotion, performance, tenure

A refresher programme has three building blocks, and they should be added in a specific order.

The sequence matters. Each layer assumes the layer beneath it is operating well. Adding performance grants before promotion grants creates inconsistency, because promotions and high-performance ratings often co-occur, and without the promotion mechanism the equity adjustment lands awkwardly. Adding tenure grants before performance grants creates a programme that rewards staying without rewarding contribution, which is rarely the culture a leadership team wants to build.

A useful pattern at each stage:

Series A: promotion grants only. Promotion is the cleanest trigger. Scope expanded, role grew, the person stepped up. The grant catches the equity package up to the new level. Easy to defend, easy to administer.

Series B: promotion plus selective performance grants. Once the performance review process is mature, layer performance grants for the top 10 to 20 percent of contributors. Concentrate the awards. A performance refresher is only motivating if it is a meaningful percentage of the recipient's existing grant.

Series C and beyond: all three layers, increasingly sophisticated. Tenure grants enter once the company has a real cohort of long-tenured employees approaching end of vesting. Many companies at this stage also begin layering milestone or performance vesting onto executive grants, and start considering boxcar designs for dilution control.

Key takeaway: Add refresher layers in sequence. Promotion first, performance second, tenure third. Skipping the order is the most common reason refresher programmes break.

Module 4: Promotion grants, the easiest layer to operationalise

A promotion grant is the equity adjustment paid when an employee moves to a new level. It exists because the new-hire grant was sized for the old level, and the employee is now operating at the new one.

The standard formula is straightforward:

Promotion grant = (new-hire grant at new level) minus (new-hire grant at old level)

Both terms are calculated at the current strike price and current valuation. The grant aligns the recipient's total equity holding with what a new hire at the new level would have received on day one.

Three design choices follow.

Vesting. A typical promotion grant uses the same vesting schedule as the new-hire grid (often four years), but with no cliff. The cliff is a fit-test for new hires. A promotion is the company's signal that the fit-test is already passed.

Cadence. Promotion grants are typically issued at the time of promotion, not bundled with the annual review cycle. Bundling creates a delay between recognition and reward that undercuts the value of the promotion itself. A monthly or quarterly grant batch is sufficient operationally.

Eligibility. All promoted employees should be eligible. Promotion grants are not a discretionary tool. They are the equity-side mechanism that keeps the new-hire grid coherent.

A note on edge cases. A promotion that crosses several levels (uncommon but real) usually warrants a single grant sized to the highest level reached, not a series of stacked grants. A promotion that occurs alongside a strong performance year is sometimes paired with a performance grant; the two are additive, but should be clearly attributed in the offer letter.

Key takeaway: Promotion grants are the simplest and most defensible refresher type. Anchor them to the leveling framework, vest without a cliff, and issue them at the time of promotion.

Module 5: Performance grants, adding the layer without breaking the system

A performance grant is awarded based on contribution, typically off the back of a structured performance review. It is the most powerful retention lever in a refresher programme, and the one most likely to fail if the underlying performance management process is not mature.

Three design parameters carry most of the weight.

Eligibility. Performance grants should concentrate on the top 10 to 20 percent of contributors. Spreading them across the whole company is a participation trophy that costs significant dilution and produces little retention lift. Concentrate the budget on the people whose departure would be most costly.

Sizing. Common range: 20 to 50 percent of the new-hire grant at the recipient's current level, calculated at current strike price and valuation. Aggressive markets and competitive talent situations push the range to 50 to 150 percent. Below 20 percent of a new-hire grant, the award rarely changes a retention decision.

Vesting. Four-year vesting, no cliff, monthly or quarterly. The grant is a forward-looking incentive, so it should look like a forward-looking instrument.

A common debate inside companies designing this layer: should executives be eligible? The market practice is to handle executives separately. Executive equity is usually negotiated as a structured package, with its own refresher cadence and often performance-vesting components. Including executives in the standard performance refresher cycle creates uncomfortable comparisons and rarely lands well.

A second debate: should performance grants reward past performance or future performance? The cleanest position is that cash bonuses reward past performance and equity rewards future performance. Performance grants are not "you crushed Q3", they are "we are betting on you over the next four years and want your equity package to reflect that."

Key takeaway: Performance grants are a retention tool for the top 10 to 20 percent of contributors. Concentrate them, size them meaningfully (20 percent or more of a current new-hire grant), and frame them as forward-looking.

Module 6: Tenure grants, the most expensive layer and when to add it

A tenure grant is awarded when an employee approaches the end of their initial vesting, typically at year three or four when the original grant is 75 percent or more vested. It exists because the retention pull of the original grant fades as it vests, and the company wants the recipient to keep building equity rather than start looking elsewhere.

Tenure grants are also the most expensive refresher type a company will run, for two reasons.

The first reason is cohort growth. Each year, a new cohort of employees crosses the eligibility threshold. The annual cost compounds, especially in a company that hired aggressively at Series A and B. A programme that fits comfortably at 1 percent of fully diluted equity in the year it is launched can become 3 to 4 percent annually within two or three years if the design does not anticipate the cohort.

The second reason is design choice. Two main vesting designs are in use, and the cost difference between them is substantial.

Layered designs are more employee-friendly and therefore more common. Boxcar designs are more dilution-friendly and are increasingly used at later-stage companies that are sensitive to pool burn.

The right time to introduce tenure grants is when end-of-vesting retention risk becomes a recurring, systematic issue rather than ad-hoc. A reasonable trigger: 10 to 15 or more employees a year reaching the 75 percent vested mark, which usually corresponds with Series C or D. Before that, ad-hoc retention grants are typically more cost-effective than a formal tenure programme.

Key takeaway: Tenure grants are the most expensive refresher line over time. Layer them in only when end-of-vesting retention is systematic, model the cohort cost across a multi-year horizon, and choose between layered and boxcar vesting deliberately.

Module 7: Vesting design for refreshers, layered vs boxcar

Vesting design has a larger effect on the cost and behaviour of a refresher programme than most teams initially appreciate. Two patterns dominate, and the choice between them shapes the rest of the programme.

Layered vesting. Each refresher grant starts vesting immediately, on a four-year schedule (or whatever the company's standard is). When a tenure grant lands at year three, it begins vesting alongside the remaining year of the original grant. The employee experiences a smoothly rising vested-equity curve, and the retention pull is strong throughout. The dilution cost arrives sooner because vesting starts immediately, and overlapping grants compound into higher annual burn.

Boxcar vesting. Each refresher grant only starts vesting after the previous grant has fully vested. The annual dilution cost is lower in the early years of the programme, but the employee's vested-equity curve has visible step changes between vesting periods, and there is a real risk of a vesting "gap" if the boxcar timing is off.

Three rules of thumb help the choice:

The first: layered is more employee-friendly and easier to communicate. It is the right starting design for most companies.

The second: boxcar is more dilution-friendly and usually appears at later stages. By Series D, many companies have shifted toward boxcar for tenure grants specifically, because the cohort cost is the dominant variable.

The third: hybrid designs exist. A common pattern is layered vesting for promotion and performance grants (which are smaller and timed differently from end-of-vesting), and boxcar vesting for tenure grants (which are larger and explicitly timed against end-of-vesting). This captures most of the dilution benefit while keeping the programme communicable.

A practical operational note. Whatever design is chosen, document it once, apply it everywhere, and resist the temptation to mix designs grant-by-grant. Vesting schedules are one of the most-questioned elements of any equity programme, and inconsistency erodes trust faster than aggressive sizing.

Key takeaway: Layered vesting is the default for most refreshers. Boxcar is appropriate when dilution is the dominant constraint, particularly for tenure grants at later stages. Document the choice and apply it consistently.

Module 8: Eligibility, who qualifies and who does not

Eligibility is where the philosophy of the programme lives. Three patterns are in use:

Three further design choices shape who actually receives a grant.

Performance rating cutoffs. A clear cutoff (for example, only employees with the top two of five rating levels are eligible for performance refreshers) keeps the programme defensible. Without a cutoff, every employee on the cusp becomes a negotiation.

Probation and recent joiners. Most programmes exclude employees who joined within the last 12 to 18 months, reasoning that the new-hire grant is still doing its job. The cutoff prevents over-granting recent joiners and concentrates the budget on the population that needs the retention lift.

Executives. Most programmes treat executives as a separate track. Executive refreshers are usually larger, often performance-vested, and negotiated grant by grant rather than rolled into the standard cycle.

A note on legal and compliance considerations. In some jurisdictions, equity programmes must apply equally to all employees to maintain tax-advantaged status. Concentrated programmes may not be compatible with certain schemes. Before finalising the eligibility model, confirm jurisdictional constraints with legal counsel, particularly in the UK (where EMI rules are specific) and in jurisdictions with statutory minimum grant rules.

Key takeaway: Eligibility is policy. Document who qualifies, where the cutoffs sit, and how executives are handled. Concentrated programmes outperform universal ones for retention, subject to legal constraints.

Module 9: Sizing, anchoring refreshers to the new-hire grid

Refresher sizing is most defensible when it is anchored to the new-hire grant grid rather than calculated standalone. The grid sets the market reference. The refresher sizing scales relative to it.

A working pattern by refresher type:

Promotion grants. New-hire grant at new level minus new-hire grant at old level, calculated at current strike price and valuation. The result is the equity adjustment that brings the promoted employee's total grant in line with what a new hire at the new level would have received.

Performance grants. Common range: 20 to 50 percent of the new-hire grant at the recipient's current level. Aggressive markets push to 50 to 150 percent. Below 20 percent the grant rarely changes behaviour. Above 150 percent the cost compounds quickly and the precedent becomes hard to walk back.

Tenure grants. Common range: 25 to 100 percent of the current new-hire grant at level. A 25 percent figure usually corresponds to a layered design (smaller, granted annually). A 100 percent figure usually corresponds to a boxcar design (larger, granted once near end of vesting).

Two practical refinements often improve the programme.

The first is a stage-based discount. Refresher grants typically size somewhere between 25 and 40 percent below new-hire grants for the same level at later stages. The reasoning: the recipient already holds equity, the per-share price is higher, and the marginal retention dollar buys less than it does at hire.

The second is a sizing tier by performance. Within the eligible population, performance grants often scale by rating tier, for example 50 percent of new-hire grant at the second-highest rating and 100 percent at the highest. This gives the programme a defensible internal differentiation rather than a single flat number.

A worked example. A Series B company has a new-hire grant of 12,000 options for a senior engineer at the current strike price. A promotion grant from mid-level (4,000 options) to senior produces 8,000 options. A performance refresher at the 50 percent tier produces 6,000 options. A tenure refresher in year four at 25 percent layered produces 3,000 options annually. Each number is anchored to the same reference (the 12,000-option new-hire grant), and the resulting equity package can be modelled forward without ambiguity.

Key takeaway: Anchor refresher sizing to the new-hire grid. Promotion grants are the level-difference. Performance grants are 20 to 50 percent of the new-hire grant at level. Tenure grants are 25 to 100 percent depending on design.

Module 10: Cadence, tying refreshers to the performance review cycle

When refreshers happen matters as much as how big they are.

Promotion grants are the exception to most cadence rules. They should be issued at the time of promotion, not bundled into the annual cycle. A delay of three or six months between recognition and reward dilutes the signal of the promotion itself. Operationally, a monthly or quarterly batch process is sufficient: HR collects promotions, the comp team calculates the grants against the current grid, the legal team produces grant documents, and the board approves a batched proposal.

Performance grants should be tied to the performance review cycle, ideally as the equity-side outcome of the same conversation that determines cash compensation changes.

Two patterns work:

• Annual cycle, single equity grant per cycle. Simplest to administer, single board approval, single communication moment.
• Annual cycle, equity grants spread over two payments (for example, half at review, half six months later). Adds operational complexity, but smooths the cap-table impact and reinforces the forward-looking framing.
  
  

Tenure grants are triggered by vesting milestones, not by review cycle. Most cap-table platforms can flag employees approaching the 75 percent vested mark, and the grant is issued either as a single award or as a layered annual award beginning at that milestone.

Three operational habits make the cadence run smoothly:

1. Calendar everything against the company's planning cycle. Refresher decisions should be informed by, not separate from, headcount planning, comp review, and board update cycles.
2. Build a refresher pipeline view that the leadership team reviews at least quarterly. Who is eligible, who is approved, what is approved, what is pending.
3. Document the timing rules in the plan policy. Employees are quick to notice if a refresher cycle slips, and a documented timeline protects credibility through fundraising or comp redesign cycles.

Key takeaway: Promotion grants follow promotions, performance grants follow review cycles, tenure grants follow vesting milestones. Calendar all three against the company's planning rhythm and document the timing.

Module 11: Budget and dilution, modelling the multi-year cost

A refresher programme's cost is the cost of the option pool consumed by refreshers over the planning horizon. Modeling that cost is straightforward in principle and underdone in practice.

The build:

1. Forecast the eligible population for each refresher type, by year, over the next three to five years.
2. Apply the standard sizing rules to each eligible population to produce a total option count by year.
3. Convert the option count to a percentage of fully diluted equity at each year-end.
4. Add the result to the new-joiner forecast already in the equity budget.
5. Compare the total to the available pool, accounting for planned pool top-ups at funding rounds.

A useful target: refreshers should represent 20 to 40 percent of annual gross equity burn at Series B and C. Above 40 percent, the new-joiner pipeline starts to suffer. Below 20 percent, the programme is probably under-sized for retention impact.

Three dilution dynamics deserve specific attention.

Tenure grant compounding. Year one of a tenure programme is cheap. Year five is not. The cost compounds because the eligible cohort grows annually and prior years' grants are still vesting. A multi-year forecast is the only way to see the full shape of the cost.

Performance grant range sensitivity. A performance grant sized at 30 percent of new-hire grant looks reasonable on paper. The same programme sized at 75 percent more than doubles the annual cost. The sensitivity to a single sizing parameter is high, and the parameter is easy to set ad-hoc. Lock it in policy.

Pool exhaustion timing. The forward question worth asking every quarter: at current run-rate of new-joiner plus refresher grants, when does the pool exhaust? If the answer is before the projected next round, a top-up is coming, and it is better to plan for it than discover it.

A modeling note. Most cap-table platforms now offer refresh-grant forecasting and pool-exhaustion projection as standard reports. Even a simple spreadsheet, updated quarterly, captures most of the value. The discipline is in running the model regularly, not in the sophistication of the tool.

Key takeaway: Model refresher cost across a multi-year horizon. Aim for refreshers at 20 to 40 percent of annual equity burn at Series B/C. Run the pool exhaustion projection every quarter.

Module 12: Communication, making refreshers feel earned, not entitled

A refresher programme that employees do not understand is a refresher programme that does not retain. The communication strategy is as important as the policy itself.

Three communication moments matter most.

The launch. When a refresher programme is first introduced, the comms should lead with the why. Why is the company introducing this. What is the company trying to achieve. How will it work. What will the employee experience be, in plain language, with examples. Lead from the strategy, not the legal terms.

The grant moment. When a specific employee receives a refresher, the conversation should be a manager-led one, not a system-generated email. The manager should be able to explain why the recipient was selected, what the grant is worth at current valuation, how the vesting works, and what the next refresher trigger will look like for them. A grant letter follows the conversation.

The ongoing rhythm. Refresher communication should be part of the year-round equity narrative, not a one-time event. The strongest programmes integrate refresher updates into compensation review communications, all-hands updates, and onboarding for new hires (so the path forward is visible from day one).

A few specific tactics that work in practice:

• A simple Personal Equity Calculator (spreadsheet or platform tool) that lets employees model their grant value across exit scenarios, with refresher entries included.
• Manager talking points and a manager training session before each refresher cycle, so the comms are consistent across the company.
• A documented refresher policy, available to all employees, that explains eligibility, sizing, vesting, and cadence.
• An equity FAQ that includes refresher-specific questions, updated as the programme evolves.
  
  

A failure mode to avoid: making refreshers feel like an annual entitlement rather than a recognition. Once an employee assumes a refresher is coming every year regardless of contribution, the retention lift collapses. Communicate the differentiation. Make clear that the programme rewards specific performance, specific tenure milestones, and specific role progressions, not the calendar.

Key takeaway: Refresher communication has to land at three moments: launch, grant, and ongoing rhythm. Lead with strategy, equip managers, document the policy, and resist letting refreshers feel like an entitlement.

Module 13: Governance, board approval, documentation, exception handling

A refresher programme is a board-level item. The governance frame matters at three points.

Initial approval. A new refresher programme should be presented to the board with the policy, the budget, the multi-year dilution forecast, and the communication plan. The board approves the framework, not individual grants.

Annual or cyclical approval. Each refresher cycle (whether annual or batched promotion cycles) is presented to the board for approval as a single proposal: who is being granted, at what size, against what trigger, with the total dilution impact summarised. The standard format is the same as for annual ESOP grants:

Exception handling. Real programmes have exceptions. A retention crisis. A senior hire whose package needs adjustment. A performance grant for an employee who did not technically meet the cutoff but contributed exceptionally. The right governance is not to prevent exceptions, but to make them visible. Every exception should be presented to the board with the reasoning, alongside the standard cycle. A pattern of exceptions is a signal that the policy needs revision.

A few additional governance habits that work well in practice:

• A documented refresher policy, version-controlled, with an effective date.
• A documented exception log, reviewed at least annually.
• A clear separation between executive equity (handled separately, often by the comp committee) and standard refresher cycles.
• An annual policy review that asks: is the cadence working, is the sizing competitive, is the budget on track, are managers using the programme as intended.
  
  

Key takeaway: Refresher programmes need board-level governance, with policy approval up front, cycle approval ongoing, and exceptions surfaced not hidden. Make the documentation as repeatable as the cycle itself.

Module 14: Common pitfalls and how to avoid them

Eight pitfalls account for most failed refresher programmes. They are predictable, and most can be avoided by design.

Each pitfall is a leadership decision, not a tooling problem. The platforms make refresh forecasting and grant administration easier than ever. The work that determines whether a programme succeeds is upstream of the platform: policy, communication, and governance.

Key takeaway: Refresher programmes fail in predictable ways. Most failures are upstream of the tooling: missing prerequisites, weak anchoring, no multi-year forecast, inconsistent communication. Each is preventable.

Module 15: Course recap, ten things to remember

1. A refresher grant system is a policy, not a sequence of transactions. Without rules, refreshers spread inconsistency rather than retention.
2. Get the new-hire grant grid right before adding any refresher layer. Refreshers cannot fix under-granting at the door.
3. Add the layers in sequence: promotion first, performance second, tenure third.
4. Promotion grants are the level-difference. They vest without a cliff and are issued at the time of promotion.
5. Performance grants are 20 to 50 percent of the new-hire grant at level, concentrated on the top 10 to 20 percent of performers.
6. Tenure grants are the most expensive line. They cost compounds across cohorts and require multi-year modelling.
7. Layered vesting is the default. Boxcar is appropriate when dilution is the dominant constraint, particularly for tenure.
8. Anchor every refresher size to the new-hire grant grid. Standalone sizing creates inconsistency.
9. Tie refresher cadence to the planning rhythm: promotions to promotion events, performance to review cycles, tenure to vesting milestones.
10. Communicate, govern, and iterate. The platform makes the math easy. The policy and the comms determine whether the programme actually retains anyone.

Frequently asked questions

What is a refresher grant?

A refresher grant is an equity grant made to an existing employee after their initial new-hire grant. The three common types are promotion grants (issued on promotion), performance grants (issued to top performers in a review cycle), and tenure grants (issued near end of initial vesting). They are the primary equity-based retention tool for tenured employees in private companies.

When should we start running refreshers?

Start with promotion grants once a leveling framework is documented and applied consistently, typically at Series A. Add selective performance grants once the performance review system is calibrated, typically at Series B. Add tenure grants only when 10 to 15 or more employees a year are reaching the end of their initial vesting, typically at Series C or D.

How big should a refresher grant be?

Anchor sizing to the new-hire grant at the recipient's level. Promotion grants are the difference between the new-hire grant at the new level and the new-hire grant at the old level. Performance grants are typically 20 to 50 percent of the new-hire grant at level. Tenure grants are 25 to 100 percent depending on whether the design is layered or boxcar.

Should refreshers have a cliff?

Promotion and performance refreshers typically vest without a cliff. The cliff exists to test new-hire fit, and a refresher recipient has already passed that test. Tenure grants follow the same convention. The full vesting schedule (three or four years, depending on the company's standard) still applies.

What is the difference between layered and boxcar vesting?

Layered vesting starts a new refresher grant immediately, alongside the remaining vesting of the original. Boxcar vesting starts the new grant only after the original is fully vested. Layered is more employee-friendly and easier to communicate. Boxcar is more dilution-friendly, with smoother near-term cost, and is more common at later stages, particularly for tenure grants.

Should every employee receive refreshers?

Promotion refreshers should apply to every promoted employee. Performance refreshers should be concentrated on the top 10 to 20 percent of contributors, not spread evenly across the company. Tenure refreshers apply to the eligible cohort (typically those at 75 percent or more vested). Universal performance refreshers waste pool capacity and produce little retention lift.

How often should we run a refresher cycle?

Promotion refreshers are issued at the time of promotion, typically batched monthly or quarterly for board approval. Performance refreshers are typically run once a year, as the equity-side outcome of the annual review cycle. Tenure refreshers are triggered by vesting milestones rather than calendar dates, but are usually approved in the same cycle as performance refreshers.

How do we budget for refreshers?

Forecast the eligible population for each refresher type by year over a three to five year horizon, apply standard sizing rules, and convert to a percentage of fully diluted equity. A reasonable target is for refreshers to represent 20 to 40 percent of annual gross equity burn at Series B and C. Always model cohort growth, particularly for tenure grants.

How should we communicate refreshers to employees?

Lead with strategy. Explain why the programme exists, what triggers a grant, how sizing works, and what the employee experience will be. Use a manager-led grant moment, not a system-generated email, when individual refreshers land. Document the policy, equip managers with consistent talking points, and integrate refresher updates into the year-round equity narrative.

Should executives be eligible for performance refreshers?

Most programmes treat executives as a separate track. Executive refreshers are typically larger, often performance-vested, and negotiated grant by grant. Mixing executives into the standard performance refresher cycle creates uncomfortable comparisons and rarely produces a defensible outcome. Run the executive equity package as a structured, comp-committee-level process.

What is the most expensive refresher type and why?

Tenure grants. Their cost compounds across cohorts because each year a new group of employees crosses the eligibility threshold while prior years' grants are still vesting. A programme that fits at 1 percent of fully diluted equity in launch year can climb to 3 to 4 percent annually within two or three years if the design does not anticipate the cohort dynamic.

What if our performance review system is not mature yet?

Hold off on performance grants. A performance refresher programme depends on calibrated ratings, manager alignment on what each rating means, and credible differentiation between performance levels. Without those, performance refreshers either reward the wrong behaviour or create perceived unfairness that undermines the whole programme. Build the review system first, refresh second.

This guide is educational, not legal, tax, or financial advice. Equity-plan decisions should be made with the appropriate professional advisors.

Sources and further reading: NASPP (founder's guide to equity retention, stage-by-stage playbook), Ravio, Pave, FirstMark.