Companies have long offered ESOPs or stock options to employees as a reward for productivity or as an incentive to keep them from going over to the competition. Employees look forward to making a packet on these stocks — but are they really such a boon? Here’s the dark side of ESOPs
“Should we break the fixed deposit or take a gold loan?” I’m sitting in the East Delhi home of a couple, both working with a Delhi-based startup unicorn. They are figuring out how to arrange for funds to pay the advance tax on the employee stock option plan (ESOP) that they have qualified for.
I’m puzzled. ESOPs are supposed to make employees rich, not send them to the moneylenders. The husband, 41, laughs at me. He picks up that morning’s newspaper and shows me a headline: ‘XX company creates over 100 crorepatis’. “I’m one of those,” he says, “except that I have to take a loan and wipe out my savings to get there!”