ESOPs! How do they work?
Hi, I am an incoming Fresher @ SF. I wanted to know how do ESOPs work. Like in the overall CTC they include them (about 20L worth) but then they say it's vested over four years. Wouldn't the CTC then actually be a quarter of what they include? Like only 5L? Also after the vesting period, do the companies stop giving ESOPs? Then does our CTC basically become Base salary + Bonuses?
Just a small followup question, is there a huge diff bw ESOPs and RSUs?
ESOP grants employees the option to buy shares of the company. RSU grants shares to employees directly with restrictions.
You need to pay money to convert options (ESOPs) to actual stock but RSUs are stock with constraints.
That's right, it is 5L per year.
Yes, after vesting period there isn't any ESOP allocation left unless you got follow-on grants due to performance or company policy
