ESOP
Fundamental analysisEmployee stock options granting the right to buy shares at a set price.
In plain terms
Rewards upside without punishing downside. Restricted shares align better than options do.
1492 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
Showing 3 terms
Read the full lesson →
Exercise price
Market basicsAlso called: Grant price
The fixed price at which an employee stock option may be converted into shares, set when the grant is made.
In plain terms
It is what separates an ESOP from an RSU. With an exercise price of ₹400 and the share at ₹250 the option is worth nothing at all, whereas an RSU is a share.
RSU
Market basicsAlso called: Restricted Stock Unit
Restricted Stock Unit — a grant of the employer's shares themselves, delivered once vesting conditions are met, with nothing to pay.
In plain terms
Unlike an ESOP it cannot become worthless, only worth less. The real problem is correlation: your salary and a large slice of your savings then depend on the same company.