Equity Claims

An equity claim means as a shareholder or business owner, you are entitled to a portion of the company’s profits
Equity claim disputes often occur when an employee is exiting the company.  Here is what you need to know.
Image

What is equity?

Equity, often referred to as shareholder equity or in the case of a private company, owner’s equity, represents the value returned to shareholders once all assets are liquidated and all debt paid. The term equity is commonly used as shorthand for a person’s ownership interest or shareholdings in a company.

How is equity used in compensation packages?

Equity earning opportunities can play a crucial role in executive and employee compensation packages, often demonstrated through shareholder programs or directly providing an equity stake in the company. These compensation strategies often incorporate short- and long-term incentive programs that include options, shares or in the case of long-term incentive programs, restricted share units, performance share units and/or deferred share units. The eligibility criteria and rules governing the shareholder programs are frequently set out in offers of employment and company policy documents. The means by which shares are to be valued can also be set out in the company’s shareholder agreement.
What is equity?

What is an equity claim?

As a business owner or shareholder in the company, you have a claim to a certain amount of the equity from the company. This entitles you to a portion of the company’s profits based on the amount, type, and valuation of your shares.
What is an equity claim
Why do equity claim disputes occur?

Why do equity claim disputes occur?

Equity claim disputes often emerge when an employee or investor in the business is leaving the company and there is a difference of opinion around:

  • the ownership in the business
  • the entitlement to the shares in the long-term incentive program
  • the vesting and value of the shares
  • whether some or all outstanding equity is vested, discounted, or forfeited upon termination

The provisions contained within an employment offer or contract, the company’s policy documents governing shareholder, bonus, and incentive programs, and the shareholder agreement are essential to accurately assessing your rights and protecting your equity stake.

How can Whitten & Lublin assist you in an equity claim?

The lawyers at Whitten & Lublin have broad experience in interpreting, challenging, disputing, and litigating equity claims for business owners and employees who have shares in a company.

After understanding your situation, we will explain your options, ensuring that your legal rights are protected.  Whitten & Lublin has handled numerous types of workplace disputes. Our skills, experience, and reputation are widely recognized by both clients and peers, making us one of the most recommended employment law firms.

Your employment
is our specialty

In need of legal advice? We are committed to treating your case with the care, dedication, and compassion that you deserve. Contact us to learn how we can help you understand and resolve your workplace legal matter.

All required fields are marked with an asterisk (*)

Name*
This field is for validation purposes and should be left unchanged.

Get empowered with every newsletter.

This field is for validation purposes and should be left unchanged.