Don't Just Ask Salary - Ask for Equity

published8 months ago
2 min read

Hey Reader

Today's Edition
⚬ So many ways you can get equity
2 mins 32 sec 47ms Read Time

Ways you can get equity

Having an equity gives you bragging rights when you tell your friends that you’re part-owner of a successful business - it’s much better than being able to say you’re a part-owner of a lemonade stand 🤓

But, on a serious note, why are companies eager to give equity to their employees?

  • They're broke and they still want best talent to work for them
  • Employees will be motivated to work harder to increase the value of their equity
  • It's a great way to retain talent - having a stake means they'll be more likely to stay around longer

Before starting, let's get the basics right and understand what is Employee equity. It is a form of non-cash compensation that provides a share of the company's ownership 😱

Here are 4 ways you can acquire equity as an employee

ESOPs a.k.a Employee Stock OPtions

ESOPs allows employees to purchase company stock at a pre-determined price and time at a discounted rate.

For simplicity, if you work for Zomato, as an employee you can buy its stocks 1 year from now at a price (exercise price) discounted from then market value *Drools in Instant Profits 🤤*

ESPP a.k.a Employee Stock Purchase Plan

This is an investment plan that allows employees to purchase their stocks at a discounted price, normally 5-15%. It's like an SIP but with predictable gains 🤑

Reach out to your HR to see if they have a ESPP that you can enroll yourself into.

SAR a.k.a Stock Appreciation Rights

SAR allows you to receive the increase in value of company's stock over a set period of time. This means that the employee doesn't directly own the share, but can own the profits coming out of the increase in price 🤩

RSU a.k.a Restricted Stock Unit

This is legit free money. No kidding. RSU are stocks that company award you over a period of time for staying with them. You do not have to buy them 🙀

There's a whole list of people who have become millionaires by working in a company. Now, the million dollar question - How can you find the companies that provide equity?

Right here on Wellfound

To conclude, equity gives you a chance to be an official “silent partner” in the business, so you can coast on the success of the company without actually putting in the hard work (lol)

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Aishwarya | The Cutting Chai 🫖

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