Problems with ESOPs/ Equity based compensation models.

Pooja Kumar
0 replies
Basis our last poll, it's evident to see ESOPs aren't really working for the company or the employee. Most attributed it to unpredictable returns and others to complex to understand, premature/ double taxation and to the dilution it entails. ESOPs are clearly undervalued by employees/hires and are complex for both. In fact, based on multiple conversations with founders/ leaders of high growth ventures below seem to be the key issues: For the Company, it doesn’t help attract quality talent at scale, since it's largely undervalued by hires. Further, it is governed by rigid regulations and is not agile/ gamified enough. It entails dilution of shareholding, in addition to being a permanent liability.  For the Employee, it is unpredictable, both in terms of value and timing and is often viewed as a lottery. It's also complex to understand. Further, some models/ markets suffer from premature/ double taxation. Glad to know we at VenEx are indeed working on solving a critical problem. Check out GetVenEx.com and let us know your thoughts.
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