Sweat Equity

When someone works for a company and is paid in shares instead of cash, they have received Sweat Equity. In other words, they have exchanged “sweat” for “equity”. Some companies offer share schemes which allow employees to receive shares for their work and this is usually considered part of the remuneration package (and this term is not used). “Sweat Equity” is usually reserved for deals where the majority of payment for work is through shares which provide future value when the company exits.