Sweet Equity
Sweet equity refers to shares offered to management or key employees at a discounted price or on favorable terms as a reward for performance or to align interests with shareholders. This equity incentivizes management to grow the company’s value, as they stand to benefit significantly if the company succeeds. Sweet equity is commonly used in private equity deals to motivate key executives.
Key Takeaways
- Shares offered at favorable terms to management.
- Aligns management’s interests with shareholders.
- Incentivizes key individuals to grow company value.
- Often used in private equity deals.
