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An equity pool is a portion of your company's total equity that is reserved for a specific purpose. In equity plans, it refers to the equity allocated to a specific group of workers and employees as part of their compensation and incentives.

For example, an equity pool may be created for managerial employees while another one may be established for ordinary workers. Equity pools provide certainty on the allocations per class or group and ensures that everyone is able to get their allocated share.