What are ESOPs?
ESOPs are stocks of a company offered to an employee either at the time of joining, or when such a plan is introduced. The offer, or option to buy, is usually valid for a fixed period, known as the vesting period, and can either be exercised in phases during the period, or at the end of it. The price the employee has to pay is usually less than the market price. That is what makes an ESOP attractive. Why ESOPs? The scorching progress of the stockmarkets in the last couple of years has thrown up several stories of regular blokes becoming millionaires overnight through ESOPs, but one needs to be cautious while treading that path to wealth. While tech companies were the early starters of ESOPs, now several industries have embraced this practice. But should you always go for them? The answer is, no. We seek to hold your hand as you walk down the ESOP and vesting lanes. What to do? ESOPs are usually used to control attrition. At the time the offer is made, you only have to agree to the sche
