Company offered equity and Esop which one to better to take
28-Jan-2023 (In Corporate Law)
company offering equity and Esop which one to take?
Take esop.
Both equity and ESOP have their own advantages and disadvantages. While equity allows you to obtain a share in the company at a discount or for free in exchange of services, ESOP allows you to buy the shareholding at a fixed rate and depending on the market rate of the shares, ESOP entails better returns. The other advantage is that there is no lock in period for ESOP whereas for equity there is a waiting period of 3 years i.e. you can exercise your shareholding rights only after 3 years. Given these two factors, it is advisable that you opt for ESOP. However, please note that ESOP is dependent on prevailing market share of the company and is therefore volatile. Thus, it involves certain risks but can give higher returns. Do let me know if you need any further clarification. Regards
Take Equity. ESOP takes a minimum of 1 year to vest in accordance with Companies (Share Capital and Debenture) Rules, 2014. Straight Equity will give you shareholding rights as soon as you become a holder of the shares.
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