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by dsr_
696 days ago
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> Should I ask for a lower salary to avoid tax brackets but more equity in return? There is no vesting schedule, so only realised on sale & if you leave its at the companies discretion about if you keep your share. If you want equity -- which means that you feel really good about this company's chances -- you want actual non-revocable ownership now. Be entered on the list of shareholders. "if you leave it's at the company's discretion" means that it doesn't exist unless you are still employed there on the day of a sale. That's not equity, that's not a lottery ticket -- that's the promise that maybe someday there could be lottery tickets. Ask for the actual lottery ticket now, or discount it right down to zero no matter how much they offer you. |
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Yup. Wish I (and a lot of my ex colleagues) knew that and didn't accept below market salaries with those ESOPs.
We got ESOPs from a USA startup which has an India office (and subsidiary which employed us) and was laid off from the company. A colleague (was laid off) tried to sell it outside and was blocked by startup lawyer. Very soon those ESOPs will expire/lapse (not sure that's the term) if not exercised. Most of us (actually none of us) can reasonably exercise that. Even at that low "strike price" that was offered to us the cost to company alone will be more than 2 years' salary of most of us (for some even more) and then the income tax (and then maybe capital gains tax) will hit us which might actually be more than that strike price amount. It's in USD and we earn/earned in INR - almost ~85x difference as of now (notionally speaking).
The startup doesn't offer to buy it themselves either. They never did. I stayed there for two years and others stayed for 4-5-6 years and they don't allow us to sell it in secondary market either. So yeah, it's lost. Even if we want to, we can't exercise - we simply can't afford it.
So yes, you are so right!