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GoofyPotato
GoofyPotato
Stealth

I need help in understanding ESOPs allocation and exercise.

Let's assume that my CTC is 60 LPA, out of which 25 lakhs are ESOPS grant.

This means I get 25 lakhs worth of the company shares, which I can purchase at a lower price set by the company which is called the exercise price.

Some companies have exercise period too that you must need to purchase those shares within X months/years of leaving the company, else you will lose those ESOPs grants.

What I want to understand is when I am the one who is supposed to first spend money from my own pocket to buy those 25 lakhs worth of ESOPs, why is it a part of my CTC?

1mo ago
1.9Kviews
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ZoomyNugget
ZoomyNugget
Stealth1mo

This comparison of esop policies should help - https://x.com/BeingPractical/status/1363352214559891456

GoofyPotato
GoofyPotato
Stealth1mo

I also understand that ESOPs are different than RSUs.

For RSUs you get the shares allocated to you (as per the vesting rules), and you don't need to pay any up-front cost to purchase those. If you meet the requirements of vesting period, you can sell those shares and get the money.

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