Can I reduce the total allotted shares in a fixed equity pool?
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Last Update 2 years ago
Yes, you can reduce the total allotted shares of a fixed equity pool. However, if you have existing vesting plans, you cannot reduce it below the total number of shares already allocated to team members under the said plans. You will need to delete these vesting plans if you want to further decrease the total allotted shares in the pool.
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Amy, Bob, and Chris are advisors of the company who were added to an equity pool called the “Advisor Fixed Pool” which has a total allotment of 30,000 shares. The company allocated 500 shares to Amy, 1000 shares to Bob, and 2000 shares to Chris, for a total of 3,500 allocated shares. The company can reduce the pool’s total allotted shares of 30,000 to as low as 3,500 but not any lower because these shares were already allocated under existing vesting plans. If the company wants to lower the total allotment to just 2,500 shares, it will have to delete the vesting plans of Bob or Chris.