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Equity compensation is an additional way for your employer to enhance your overall pay by providing you with a stake in the company. This can lead to increased compensation if the company's stock price rises, but it can also decrease if the stock price falls. Understanding the different types of equity compensation plans, such as stock options, restricted stock awards, and restricted stock units, can help you maximize the benefits of your plan. Each plan has its own terms and conditions, so it's important to know how they work to manage your expectations.