Capitalmind Podcast ESOPs Demystified: Taxes, Dilution & the Path to Wealth in India!
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Sep 23, 2025 Explore the intriguing world of Employee Stock Options (ESOPs) in India, where the trade-offs between salary and stock options can define financial futures. Discover how ESOPs turn into real shares and the nuances of taxation and liquidity before IPOs. Learn about the structure and valuation of options, and why alternatives like RSUs may be more suitable. The podcast also emphasizes crucial aspects employees should consider in their ESOP packages, and shares post-payout strategies to preserve wealth. Get ready to demystify compensation!
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When ESOPs Replace Salary
- Early-stage hires often accept lower salary because companies lack cash and compensate with larger ESOPs.
- Later, once the company is cash-positive, ESOPs serve mainly as incentive alignment rather than primary pay.
Personal ESOP Win Changed Perspective
- Deepak described his 2007 ESOP payout that exceeded his annual salary and changed his view of stock options.
- He says ESOPs feel like asking employees to invest their forgone salary into a future payoff from the company.
Flipkart Exit Validated ESOPs
- Flipkart's 2018 sale to Walmart was a turning point that demonstrated ESOPs can pay real cash to employees.
- That exit changed other companies' attitudes and made ESOPs meaningful compensation in India.