The pool and the resolutions that change it
The pool is the total number of units the company has reserved for its incentive plans. It is approved by the general meeting, grows or shrinks with new resolutions, and is split into units granted to beneficiaries and units available to grant.
On this page
The key point. Pool = granted + available. Granted units have already been given to someone; available units are the room you have left for new joiners. The size of the pool is not decided in Sttok: the general meeting decides it, and Sttok reflects it.
What the pool is#
Before granting a single unit, the company decides how much of itself it wants to reserve for its team. That reserve is the pool (sometimes called the incentive pool). It is expressed in units and, to understand its size, as a percentage of the share capital.
Plans come out of the pool, and grants to each beneficiary come out of each plan. There are three levels: pool, plan and beneficiary.
Phantoms and stock options are counted separately#
If the company has plans of both types, it actually has two pools: one for phantoms and one for stock options. They are not the same. A stock option can end up becoming a real share; a phantom is only a right to be paid. That is why the register of registered shares shows them on separate rows, each with its granted and ungranted units, and the pool in Sttok matches those rows.
The pool figures#
| Figure | What it means | Example |
|---|---|---|
| Total | The units the company has reserved. | 120,000 |
| Granted | Those already given to beneficiaries, whether vested or not. | 45,000 |
| Available | Those left to grant. | 75,000 |
| Pool percentage | The size of the pool compared with the share capital. | 8.00% |
A percentage only means something if you know what it is calculated on. The pool measured on the shares issued today is not the same as the pool measured on the fully diluted share capital, which already includes the pool itself and the other instruments that can convert into shares. The second always comes out lower.
In "Incentive Plans", the "Summary view" button shows the detail of each plan: total, granted, available, vested, canceled and acquired units.
The resolutions that change it#
The pool changes when the general meeting decides so. The usual cases are:
- Creating it, often alongside a funding round, when investors ask for a plan for the team.
- Increasing it in later rounds, because the team grows and the pool gets used up.
- Reducing it, if there are units to spare. Never below what has already been granted: those units have been given to people.
Each of those changes is a resolution with its date and its minutes. Keep the minutes in Sttok, so that you can always check why the pool is the size it is.
To reflect a change in Sttok, go to "Plans list". For a new plan, click "Add Plan" and attach the resolution in "Add deed (optional)". To increase or reduce an existing one, open the plan and change its "Plan shares (pool)" with "Update plan".
Units that go back to the pool#
When a beneficiary leaves the company, the units they had not yet earned are usually canceled and go back to the pool as available. What exactly happens to the vested units and to the rest is set out in each plan's conditions. Canceled units appear in their column in the "Summary view".
Frequently asked questions#
How big should the pool be?
There is no mandatory figure: it depends on the company, its stage and what is agreed with investors. What is worth doing is always knowing what base the percentage is calculated on.
Why can't I grant more units?
Because there are none left available in that plan or in the pool. To grant more, it has to be increased, and that is agreed by the general meeting.
Does granting units change the share capital?
No. Granting units does not issue shares. The share capital only changes if someone exercises a stock option and the company issues new shares for it.
Related
- What an incentive plan is An incentive plan is how Sociedad Ejemplo, S.A. shares with its team part of the value it creates: it grants you units that become yours over time and that turn into money when the company opens a liquidity window.
- Create an incentive plan You create a plan from "Incentive Plans" ("Plans list" menu) with "Add Plan": the plan type, the name, the start date, the plan's shares (pool), the price per unit, which is the exercise price, and the vesting schedule (cliff, vesting and speed). You can create it as a draft and ask Sttok to generate the conditions for each beneficiary.
- Grant units to a beneficiary Granting means giving a person a number of units of a plan, with "Add Beneficiary" in "Incentive Plans", which opens the "Add Beneficiary to the incentive plan" dialog: the beneficiary, the plan, the grant date, the units and the invitation date. The grant inherits the plan's conditions, unless you change them for that person, and Sttok can send them the invitation letter to sign.
- The register of registered shares Sttok's register of registered shares is the complete record of who holds shares in the company, of which class and in what percentage. It is not edited: it builds itself from the recorded operations, and it can be read in several views, from the summary by class to the history of each operation.