Equity Pay Beyond the C-Suite

Equity pay is now widespread, but levels vary dramatically across firms. Using hand-collected data on S&P 1500 firms over 1994–2019, we show that firm-level equity pay is highly persistent: lagged values explain over 60% of cross-firm dispersion ten years out, and initial values at IPO are the dominant driver of long-run differences. Financial constraints and peer effects shape these initial values, and firms subsequently manage grants to partially offset stock-price moves. By contrast, CEO equity pay is markedly less persistent and is lower at younger high-growth firms. A dynamic model with financing and retention benefits from accumulated unvested grants rationalizes these patterns, and a counterfactual decomposition attributes over 80% of the rise in
equity-pay inequality to rising human capital intensity and productivity volatility.