ESOPs, in plain English

What actually happens when my ESOPs vest? Vesting means you have earned the right to buy your options, not that you own shares yet. On the vesting dates the options become yours to exercise... 3 resources → Do I owe tax when I exercise my ESOPs in India? Usually yes, and this catches people out. In India, exercising ESOPs is itself a taxable event: the gap between the fair market value on the exerci... 3 resources → My ESOPs look valuable on paper. Is that real money yet? Treat it as real only when it is liquid. A paper value is the latest round or 409A price times your vested shares, minus the strike you have to pay... 3 resources → What happens to my ESOPs if I leave the company? It depends on your grant, and the details can be expensive, so read it before you resign. Typically you keep only what has vested, and unvested opt... 3 resources → How do I tell if an ESOP grant in a job offer is any good? Look past the headline number to what you actually own and what it might be worth. Ask for the specifics: how many shares (not just a rupee value),... 4 resources → What happens to my ESOPs when the company gets acquired? It depends entirely on the deal, so read the term sheet and your ESOP plan closely. Vested options are usually cashed out at the agreed per share p... 3 resources → What is a strike price, and why does it matter for my ESOPs? Your strike price (also called the exercise price) is what you pay per share to turn an option into a share you own. It is usually set at the fair ... 3 resources → Should I exercise my ESOPs early, and does that actually save tax? Exercising early can cut your tax, but it also puts your own cash into an illiquid, risky asset, so weigh both sides. In India the perquisite tax o... 3 resources → My company offered to buy back some of my vested ESOPs. Should I take it? A buyback is one of the few times startup equity turns into real money, so it deserves a serious look rather than a reflex yes or no. Ask what pric... 3 resources → Do I pay tax twice on my ESOPs, once when I exercise and again when I sell? In India there are usually two separate tax events, which can feel like being taxed twice but is really tax on two different gains. First, when you... 3 resources → My ESOPs are in the US parent company, not the Indian entity. What changes for me? Many Indian startups flip to a US holding company, so your options may be over foreign shares even though you sit in India. That mostly changes the... 3 resources →