Depends on the company. (Personal experience) I joined a startup (privately held) in a senior position. Well comped in cash and bonus. No stock or options. Ye

Depends on the company. (Personal experience) I joined a startup (privately held) in a senior position. Well comped in cash and bonus. No stock or options. Years later, the company was acquired by a larger company. The owner/CEO who sold the company granted stocks to the senior leadership and I got stock. This was exchanged for stock in the acquiring company. The acquirer was a funded by strategic investors and venture funds and not IPOd yet. They went public 2 years later. I started getting stock option grants each year. At that company, the stock option grants were reserved for performance. Let us say people were rated on performance as A (Exceeds), B (Meets), C (Meets some), D (Needs improvement). A would get x% over and above of eligible bonus. B will get eligible bonus, C will get eligible bonus less y% and D doesn't get the bonus. There's bell curves and all that jazz applied for each level (actually sets of levels that are functionally similar eg: Director/Sr. Director would be looked at together and similary VPs/SVPs together, EVPs/Presidents together etc.,). The A's were eligible for stock option grants depending on tenure (i.e., after xx years of service in the company). The quantum of option grants depended on whether the A's were also eligible for promotion. For eg: a director (rated A) getting promoted as VP would be eligible for an additional option grant quantum as part of the promotion whereas a director (rated A), but not eligible for promotion would get lesser than the first one. The board has a compensation committee that lays out these rules for "Key Managerial Personnel" eligible for stock/option grants. Edit: The grants vest over 4 years. Intended to keep the key personnel for that period at least and their behaviors aligned to the shareholders. (Anecdotal) I have also heard of companies that grant stock options to a broad base of employees with the eligibility being tenure and performance. I have always heard it to be a differentiated grant.