Private Equity & VCBeginner
ESOP
Employee Stock Option Plan
A plan that gives employees the right to buy company shares at a fixed price in future.
Detailed explanation
Options vest over time, often four years. Common in start-ups to attract talent when cash is limited.
Why it matters
Can make up a large part of start-up compensation.
Key points
- Vesting schedule.
- Exercise price fixed upfront.
- Taxed at exercise and sale in India.
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Educational content only. Definitions and examples are illustrative and are not investment, tax or legal advice.