How Our Equity Plan Inspired Employee Ownership and Delivered a 31% in ROI

This is the story of how Semrush moved from a limited, often misunderstood stock plan to a performance-aligned model that increased engagement, extended retention, and delivered a 31% return on investment.

There’s a question many companies discuss but rarely measure: Can an equity plan create a sense of ownership for employees and deliver business value?

Between 2021 and 2024, we (aka the Total Rewards team) rebuilt the plan a number of times and ultimately developed the final version that delivers the greatest value. In several phases, we introduced clear eligibility rules, replaced stock options with RSUs, aligned grants with performance and potential, and shortened vesting to reflect real career timelines. Finally, we unified global policies and embedded fairness as a design principle.

The result was not just a revamped master equity plan, but also a mindset shift. Employees began asking about equity with interest. It became one of the most valued parts of our rewards package. Retention improved. Trust deepened.

But most importantly, the return has become measurable. Through a conservative opportunity cost lens, we found that longer retention alone delivered a visible financial benefit.

This is not a story about chasing KPIs. It is about building a system that helps people feel like owners and act this way too.

The Broken Promise

Back in 2020, if you had asked our employees, “Do you feel a real sense of ownership when it comes to Semrush’s success and the projects you drive?”, the most common response would have been a polite shrug.

Yes, we had stock options. Yes, we were growing fast and preparing for an IPO. But our equity incentive plan felt like a checkbox. Only a small group of employees received grants, and there were no clear rules or connection to performance. The four-year vesting made it easy to leave before seeing value.

One engineer put it plainly: “I guess I’ll get something if I stick around… but it’s not why I’m here.”

Another said it even more bluntly: “Take it back. It’s a burden and will only cause problems with all the extra costs I’ll have to cover.”

That hit us. It made clear how disconnected the plan had become, not just financially, but emotionally. It was time to face what wasn’t working.

Facing the Truth

The first step was to look inward. We audited our equity education materials and quickly identified the problems. The only resource was a two-hour video, a plain technical monologue with no visuals, no interactivity, and no way to navigate. Most employees had little financial background, and the materials simply did not meet them where they were.

But the communication gap was only the surface. The deeper issue was that our equity incentive plan failed to evolve with the company. Semrush went public in 2021, but our structure remained behind—we had only stock options. After the IPO, we introduced a mix of options and RSUs.

| Stock options are like a “coupon” to buy company shares later at today’s price—their value depends on the stock going up.

| RSUs (restricted stock units) are like a “gift” of shares over time, which have value regardless of price, making them simpler and less risky for employees.

However, grant levels were low and policies varied across regions. There was no clear standard and no real sense of ownership.

Meanwhile, the market kept moving. Top candidates were receiving offers with simpler, more competitive equity plans, which highlighted the gaps in our own approach. The same lack of clarity and value that made it harder to attract new talent also affected our current employees.

Each departure carried a cost, not just in hiring and onboarding, but in momentum and trust.

The question became urgent. How could we rebuild the equity plan to reflect ownership, align with market expectations, and provide more favorable conditions for employees?

Redesigning for Ownership

We knew we had to start over. Not just with new grant numbers or policies, but with a fundamentally different way of thinking about equity.

We began by asking heavy questions. Who should receive equity, and why? Should we continue with stock options or simplify with RSUs? How could we reward growth, not just tenure? How could we finally correct the fairness gaps that had been silently tolerated for so long?

The conversations were intense. Equity is emotional—it touches recognition, ambition, and trust. Some leaders argued for broad access, others for sharper focus. But after long debate, we found our direction: equity should feel earned, but also reachable. It should be fair, motivating, and simple.

We built a new model from the ground up, and these were the shifts that made the difference:

• Created one global framework for grant sizing, with consistent logic across levels and locations. This ended the era of fragmented, locally driven exceptions.
• Shifted to granting RSUs only for all new awards, discontinuing stock options. This made equity easier to explain, easier to value, and less financially risky for employees.
• Shortened vesting to 3 years, making equity feel more tangible and better aligned with real-world retention cycles.
• Linked performance and potential, using a 9-box framework to guide award sizing. This moved equity from a tenure reward to a forward-looking investment.
• Built clear and friendly communication, including guides, Q&A support, and manager enablement. Finally, people understood what they were getting and how to earn more of it.

This was not just a policy change—it was a cultural redesign. We reframed equity as something to grow into. Not something handed out in mystery.

And the shift was almost immediate.

Within a year, our one-year retention rate for employees with equity grants reached a record high of 96%. Coverage expanded from 10% of the company to 38%. Equity stopped being reserved for a select few.

Employees began asking how to earn equity, not whether they had it. Equity became one of the most valued elements of our total rewards package. Trust increased. Motivation deepened.

Most importantly, equity became tied to impact. The majority of grants were performance-aligned, with top contributors earning well above midpoint levels. The gender gap in equity eligibility narrowed to 6% and among performance-based grants, it disappeared entirely.

Equity stopped being something people did not understand. It became something they believed in.

The Financial Moment: Proving ROI

Equity plans are expensive, but when they create a feeling of true ownership for employees, they become an investment with real return.

We looked at the numbers through the lens of opportunity cost. On average, employees who received equity stayed 22 months longer than those who did not. Using a modest assumption that losing one employee costs the company roughly 50% of their annual salary, the outcome was clear.

The result was a net ROI of 31% compared to what was invested into the plan.

This was not about exact accounting, it was about recognizing what happens when equity is more than a line item. When people feel like owners, they commit differently. They stay through product cycles, grow with the business, and think long term.

That is what turns equity from a benefit into a business driver. Ownership pays off. And we could finally measure it.

What Every Company Needs to Know

Looking back, a few principles made all the difference.

First, be clear about who gets equity and why. When eligibility is transparent, trust grows. People stop guessing and start believing.

Second, link equity to contribution. Rewarding impact and potential, not just time served, creates momentum. Good people will often exceed expectations when they feel seen.

Third, keep it simple. Complexity confuses and devalues. For us, moving to RSUs made the equity incentive plan easier to understand for employees and, in turn, easier to appreciate.

And finally, measure what matters. You do not need perfect data to prove value. Even a humble estimation can show what happens when people feel like owners. The numbers followed the mindset.

If we learned anything, it is this: equity only works when people believe it is theirs. That belief is what turns shares into ownership, and ownership into true impact.