Taxation of ESOP Liquidity: Buybacks & Beyond

Introduction : Employee Stock Option Plans (ESOPs) are becoming an increasingly important part of the remuneration package in the start-up and technology sectors in India, as they provide employees with compensation that depends on the company's value. Unfortunately, ESOPs are also a very illiquid form of asset unless the employees are able to convert their paper gains into cash through a liquidity event. The primary liquidity options for private companies before their initial public offering...