The definition
An equity refresh, sometimes called a refresh grant or a top-up, is a new stock grant a company gives to an employee who is already there, on top of the equity they were granted when they joined. Refreshes are typically issued annually, often tied to performance reviews, and they exist to solve a structural problem with initial grants: your joining grant vests over four years and then stops, so without new grants your equity income would fall off a cliff in year five.
Refresh grants are how strong companies keep total compensation roughly flat or growing over a long tenure. Each refresh has its own multi-year vesting schedule, so over time you have several overlapping grants vesting at once. The overlap smooths what would otherwise be a sharp drop. Whether a company refreshes well is one of the most important and least discussed factors in the long-run value of an equity-heavy offer.
The cliff problem refreshes solve
Consider a four-year initial grant with no refreshes. In years one to four you receive a quarter of the grant each year. In year five, that grant is fully vested and there is nothing left, so your equity income drops to zero overnight. If equity was forty or fifty percent of your total compensation, your effective pay just fell by that much. This is the equity cliff, and it is a real reason people leave companies that do not refresh, often right around the four-year mark.
Refresh grants prevent this by layering new equity on top before the old grant runs out. A well-run refresh policy might grant you, each year, an amount that maintains your target total compensation as earlier grants taper. Because each refresh has its own vesting schedule and sometimes its own cliff, your year-five income comes from the tails of several grants rather than from one that has expired. The result is continuity instead of a cliff.
Why refresh matters when comparing offers
Two offers with identical first-year numbers can diverge enormously over four years depending on refresh policy. An offer with a large initial grant and no reliable refresh can be worth less, over a real tenure, than one with a smaller grant and a strong refresh cadence, because the second keeps paying while the first decays. The first-year headline TC hides this entirely, which is why you should ask about refresh explicitly before accepting.
When you negotiate, ask concrete questions: does the company grant annual refreshes, are they tied to performance, and roughly what size relative to the initial grant. Recruiters will not always volunteer this, but it is a fair and important thing to ask. For senior and staff offers, where equity dominates the package, the refresh policy can matter more than the size of the initial grant you are negotiating over.
Frequently asked questions
- What is the equity cliff and how does a refresh fix it?
- The equity cliff is the drop in compensation that happens when your four-year joining grant fully vests and there is nothing left, often in year five. A refresh grant fixes it by layering new equity on top each year before the old grant runs out, so several grants vest at once and your income stays continuous instead of falling off a cliff.
- Are equity refreshes guaranteed?
- No. Refreshes are usually discretionary and often tied to performance reviews, so they are not contractually guaranteed the way your initial grant is. This is exactly why you should ask about the company's typical refresh policy before accepting, since an offer's long-run value depends heavily on whether refreshes actually materialise.
- Should refresh policy change which offer I accept?
- It can. Two offers with the same first-year compensation can diverge sharply over four years depending on refresh. A smaller initial grant with a strong refresh cadence may beat a larger grant with no refresh over a real tenure. Always weigh refresh policy alongside the initial grant, especially for equity-heavy senior and staff roles.