How having a clear SOP for ESOPs can help optimise their value-creation potential
Synopsis
ESOPs can be an efficient compensation instrument for firms and staff. However, regardless of laws and tips, the method — from designing ESOPs to constructing worth in them — is filled with uncertainties and ambiguities. This results in the query: How a lot of ESOP worth have staff been capable of realise? Addressing the challenges can make this instrument extra enticing to startup staff.
The latest unicorn within the nation — that’s what you’d get for those who add up the worth of worker inventory choices (ESOPs) supplied by a few of India’s most-funded startups. There’s a dampener, although: The worth of the ESOPs remains to be principally unrealised. But earlier than moving into that, how is the quantum of ESOPs determined? Bigbasket’s HR head, creator, and angel investor Hari TN has steered many firms by way of their ESOP processes. He says that 3% to five%
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