{"id":3364,"date":"2020-11-27T09:28:02","date_gmt":"2020-11-27T09:28:02","guid":{"rendered":"https:\/\/staging.trica.co\/equity\/blog\/?page_id=3364"},"modified":"2020-11-27T09:28:02","modified_gmt":"2020-11-27T09:28:02","slug":"esops-for-employees-learn-the-true-value-of-your-esops","status":"publish","type":"page","link":"https:\/\/trica.co\/equity\/blog\/us\/homepage\/esops-for-employees-learn-the-true-value-of-your-esops\/","title":{"rendered":"ESOPs for Employees – Learn the true value of your ESOPs"},"content":{"rendered":"

<\/span>Employee Stock Options Plans are wealth creation plans that essentially give an employee the option to buy a certain amount of company shares either at market value or at a discounted price.<\/strong> <\/div><\/span>Employees with ESOPs, therefore, become potential shareholders of the company. As per the stipulated time frame defined in their ESOP scheme document, employees can actually buy the shares once provided to them as an option. Post this, they can either monetize all or some of these shares when the company announces a liquidity event<\/a><\/span> like a buyback or secondary sale or an IPO (Initial Public Offering). This complete or partial monetization of ESOPs (if the startup has done well and has considerable valuation) will exceed the employee’s standard remuneration. In startups, not exercising ESOPs will lapse (after a stipulated period) and return to the ESOP pool<\/a><\/span>. In simple terms, ESOPs empower employees with a monetary edge.\u00a0\u00a0\u00a0<\/span>
\nDeepak Abbot, a former senior VP at Paytm, says in a webinar<\/a><\/span>,
<\/span>Employee Stock Option Plans for long have been undervalued in India but many success stories of employees creating wealth through ESOPs and eventually building their own startups have slowly started to build a strong culture of wealth creation among employees.<\/div><\/div><\/span><\/span>
\nWhile companies are leveraging ESOPs as a retention tool and growth multiplier, ESOP benefits for employees can be accrued from the overall process. To summarise, ESOPs pave the way for employees to:<\/span><\/p>\n