It refers to the additional return that an individual stock or the overall stock market provides over a risk-free interest rate. This excess return entices investors for taking on the relatively higher risk of the equity market. Typically, the rate paid on Treasury bills is taken as risk-free rate. Riskier the investment, higher is the equity risk premium.
In terms of the Capital Asset Pricing Model (CAPM), equity risk premium is the slope of the Securities Market Line (SML).