India's booming tech scene offers lucrative salaries for software engineers, product managers, and product designers. However, these salaries are composed of multiple parts: fixed compensation, bonus, and Employee Stock Option Plans (ESOPs). This blog dives deeper into ESOPs, a crucial element for many tech professionals. Vesting periods typically last four years, making ESOPs a potential path to significant wealth creation. Additionally, they foster a sense of ownership and alignment with the company's growth.

How Much Equity and Bonus Are Standard in today's Indian Tech Market?

To answer this question, we analyzed a random subset of our data:

• Base Salary: 10-25 LPA (Sample Size: 10,000)some text
  • 54.3% of candidates receive ESOPs/RSUs
  • Average ESOP value: 23% of total compensation
  • Average variable pay: 12% of total compensation
• Base Salary: 25-50 LPA (Sample Size: 9,748)some text
  • 73% of candidates receive ESOPs/RSUs
  • Average ESOP value: 21.6% of total compensation
  • Average variable pay: 9.7% of total compensation
• Base Salary: 50-100 LPA (Sample Size: 2,819)some text
  • 85% of candidates receive ESOPs/RSUs
  • Average ESOP value: 23% of total compensation
  • Average variable pay: 10% of total compensation

As you can see, ESOPs and variable pay percentages remain relatively consistent across different salary ranges. On average, ESOPs contribute around 23% to total compensation, while variable pay contributes around 10%.

Source: You can check this randomized dataset with companies.

Are ESOPs Real Money?

ESOPs and stock options have the potential to make you wealthy quickly. However, it's important to understand the conditions for realizing their value:

• Company Goes Public: Publicly traded companies allow employees to sell their vested shares on the stock market.
• Company Acquisition: When another company acquires your startup, you may be able to sell your vested ESOPs or receive shares in the acquiring company.some text
  • Only about 1500 funded startups out of total 20k have been acquired so far (fewer where money was made by ESOPs holders). 7% startups get acquired so I would assume only in only 1% startups can employees make real money
• Company Buyback: Companies can choose to buy back vested ESOPs from employees, providing them with immediate liquidity.some text
  • There are currently about 19,000 funded active startups in India right now. Only about 100 or so have done ESOP buybacks so far.

The Bottom Line: Potential vs. Probability

While the chances of striking it rich through ESOPs are statistically low, they're not random. By joining a high-growth startup with strong potential, you can significantly improve your odds of profiting from your ESOPs.

Which companies pay the highest equity?

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Find the larger list in this sheet.

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