Summary Table

Modified on Tue, 5 Aug at 10:58 AM

Here's a summary table covering what we have gone through! To check what you have, take a look at your offer letter, grant agreement, or employee stock portal. If you’re unsure about the terms, do contact your HR department or stock plan administrator.

Type	What It Is	Who Usually Gets It	Pros for Employees	Cons for Employees
ESOP (Employee Stock Ownership Plan)	Company sets aside shares in a trust or pool to be allocated to employees — usually after meeting certain service conditions. In the US, this is a formal retirement plan; in Asia, it's often a general stock plan.	Employees in mid-to-large companies; common in India and Southeast Asia. In the US, ESOPs are more common in legacy or employee-owned firms.	- No upfront cost - May receive a large number of shares over time - Encourages long-term loyalty	- May have limited control over the shares - Vesting and holding periods apply - Value depends on company performance
RSU (Restricted Stock Unit)	Promise to give actual company shares in the future, usually after staying for a few years (vesting). You don’t need to buy them.	Mid-to-senior employees in tech firms and large companies. Common in both Asia and the US.	- No money required to receive shares - Value is easy to understand - Often part of total compensation package	- Taxed when shares are delivered (vest) - No control over timing - No voting rights until vested
Stock Options (NSO/ISO)	Right to buy shares at a fixed price later. If the company grows, you can buy low and sell high. • NSO (Non-Qualified Stock Option): Used globally • ISO (Incentive Stock Option): Only in the US, with tax benefits if held long enough	Common in startups and high-growth companies. ISOs are limited to US employees.	- High upside if company value increases - May allow flexible timing - Potential tax perks (US ISO only)	- Must pay to exercise - Can expire - Tax rules vary by region - Shares may not be easily sellable
SAR (Stock Appreciation Right)	You don’t get shares directly. Instead, you’re paid the increase in stock price as cash or shares. Often used instead of options.	Offered by US companies and some Asia-headquartered multinationals. Used when companies want to avoid giving out equity.	- No need to buy shares - Can be settled in cash - Less dilution for company	- No ownership or voting rights - Taxed as income when settled - Depends entirely on stock performance