Understanding Employee Benefits Packages

ESOPs don’t always work, but when they do its magical 5000 Swiggy employees made around 9000 crores in the IPO Some would have made 100 cr plus Many many more would have made 10 cr plus Life changing money for most people and will enable risk taking and another 100 plus startups from this set If you are evaluating offers from startups with significant ESOP component, this is how you should evaluate it For an employee to make meaningful money through ESOPs, 2 things must happen: - Growth in company value - Employee friendly ESOP policies that ensures employees make money when company grows a) Growth in Company Value This is where employees need to think like investors Just like investors are particularly wary of what valuation they are coming in, entry valuations should matter for employees too ESOPs are allotted basis the current valuation The likelihood of a 10x growth in your ESOPs if you are joining a startup valued at 100 million $ is much higher compared to joining a startup already valued at 5 billion $ A 75 lakh ESOP allotment in a 1000 cr valued org with chances of a 10x growth could be a better offer than 2 cr ESOP allotment at a 20000 cr valued org with lower chances of future growth The second thing to judge is the business model and the likelihood of the business to grow( very important for Seed/Series A/B startups) b) ESOP Policies The startup ecosystem is full of stories where employees didn’t make money despite the company growing and having multiple liquidity events. Swiggy, Zomato are examples of great ESOP policy. Many companies have extremely shitty ones Here are the things that should matter most while evaluating policies: 1. Vesting Schedule: The standard is 25% vesting after every year. Any schedule which has higher vesting towards the later years is a red flag Vesting should never be performance linked If performance is bad, it is management’s responsibility to fire 2. Vesting on Leaving/Startups Exit: If you exit, you should retain all options that has vested If a startup gets acquired before all your options vest, there should be accelerated vesting 3. ESOP Communication: There should always be written communication( preferably through ESOP portal) Verbal communication for ESOPs is a huge red flag 4. Strike Price: Strike Price should be as low as possible( Re 1 ideally). This maximizes the value creation for the employee 5. Holding/Exercise Period: Converting options to shares is a major tax liability exercise. With limited exercise period, it becomes impossible for employees to exercise as it means paying up to 40% real taxes on notional capital gains in an asset class that is not liquid Ideally, holding period should be infinite for vested options, even after exit This enables employees to wait for liquidity events without incurring upfront taxation to be paid out of own pocket

United Airlines employees paid their broker 64 cents per premium dollar in year one. 64% went to Mercer as commission. Not to medical care. Not to claims. To the broker. Then it "improved" to 27% by 2023. Mysteriously dropped to 2% in 2024 when lawsuits started flying. The full picture: 2020-2024: Mercer collected $14 million at 36% average commissions from United employees. Industry standard: 10%. Same broker charged other employers far less: Circle K: 6% PVH Corp: 2.1% Kohl's: 10.1% United Airlines: 36% Same broker. Same services. Prices based solely on how closely the employer monitored fiduciary duties. What employees were buying: Accident insurance. Critical illness coverage. Hospital indemnity policies. They exist because United's base health plan exposes employees to catastrophic cost-sharing. United has 107k employees and $57 billion revenue. Elite negotiating power for jet fuel, aircraft, landing slots. Yet they let their broker charge flight attendants and ramp workers 36% commissions on products designed to prevent medical bankruptcy. The human cost: Flight attendants making $50K. Customer service agents at $40K. Ramp workers at $35K. These are the people carrying medical debt. The ones who can least afford financial shocks. They paid 6-18x more in broker fees than employees at other companies using the same broker. With Mercer taking 36%, maximum possible loss ratio: 60%. Actual estimated loss ratio: under 50%. Employees received less than 50 cents per dollar spent on products they felt compelled to buy. Mark Cuban showed how PBM rebates make sick patients subsidize the healthy. This model does the same. Lower-wage, higher-risk employees subsidize the employer (who offers cheaper base plans) and the broker (who extracts massive commissions). The firm with three unanimous Supreme Court ERISA victories (Schlichter Bogard) revolutionized 401(k) fee litigation is now targeting health benefits. The United case shows even worse abuse than Community Health Systems filed the same day. For employers: Your voluntary benefits likely violate ERISA fiduciary duties. For brokers: Mercer charged United 36% and Circle K 6% for identical services. That's not market pricing. That's exploitation. The alternative: Health Rosetta, a Public Benefit Corporation certification trains you to deliver 20-50% cost reductions while improving benefits. Meaningful work worth 100x more than another carrier incentive trip. For United employees: If you bought voluntary benefits 2019-2024, you may be part of this class action. We're hosting a webinar on both cases. Registration, detailed legal analysis, and Nautilus Health Institute resources on better benefit systems are linked in the comments. The old model is dying. When an airline lets a broker charge 64% commissions while other employers pay 2-6%, fiduciary failure has consequences. The new model is already bigger than the U.S. video game industry (>$50B). Click 👇 for the full analysis.

An old friend of mine and I were sitting on a video call. He had recently landed a job after a few months of struggle. The offer letter proudly mentioned ₹10 lakh in ESOPs, directly counted as part of his annual CTC. He had no idea what that meant. So I explained it to him the way I wish someone had explained it to me. ESOPs are stock options: short for Employee Stock Option Plan. An option is simply the right to buy a share later at a fixed price (called the exercise price). The catch is that you don’t get all of them on day one. They vest over time (usually across 4 years) The big confusion is the headline number (₹10 lakh in this case). So let’s break it down. Suppose today’s stock price is ₹100. That means the company is giving you 10,000 options (₹10 lakh ÷ ₹100). When the company offers you these options today, it’s basically saying that a year from now, if the share price rises to ₹110, you can still buy it at ₹100. So a year later, you buy shares worth ₹10 lakh at ₹100 each, then sell them at ₹110. Your profit is (₹110 – ₹100) × 10,000 shares = ₹1 lakh. But you don’t get all 10,000 shares in year one. With a 4-year vesting schedule, you get only 25% in the first year. That’s 2,500 shares, meaning a profit of ₹25,000 in year one. That ₹10 lakh in CTC can shrink to ₹25,000 in reality. And that’s only if the share price goes up. If it doesn’t, you get nothing. Another thing people forget: liquidity. If the company is private, you can’t just sell your shares anytime. You usually have to wait for a buyback, a secondary sale, or an IPO. And even then, taxes apply, which I won’t get into here. If you join an early-stage startup with a low exercise price and believe in the upside, ESOPs can create massive wealth (as seen in Swiggy and Zomato) but the ₹1 Cr stock option would translate to ₹0 if the stock price drops below the exercise price. So the next time you see a big number in your offer letter under ESOPs, make sure you know the math behind it. Arin Verma

A staggering 44% of people think about leaving their jobs every year in the UAE. Which is much higher than the global average of 28% according to the PwC Middle East Hopes and Fears Survey 2023. And when you add up the costs of recruitment, training, and the time it takes to get a new hire up to speed, the reality is a massive hit to your bottom line. But many companies overlook one of the simplest ways to retain their best talent: Investing in great health insurance. 👌🏼 When employees know they’re protected, they’re more likely to stay with your company, work harder, and feel like they’re part of something that values their well-being. And the result is lower staff turnover, higher morale, and a team that’s engaged and loyal. I’ve seen companies that chose to invest just 5% more in their health insurance plans, and the results were staggering. Staff turnover dropped significantly and productivity increased. The fact is, the extra money you invest now saves you tens of thousands in turnover costs down the line. You can’t put a price on a workforce that feels protected, valued, and motivated to stick around. #HealthInsurance #Investment #EmployeeWellness

Good news for salaried people!! Every time someone talks about withdrawing money from their EPF account, the conversation usually ends with, "The process is too confusing." Different rules for different situations, different waiting periods and too many conditions have made it harder than it should be. Well, that's changing from this July. The government has introduced the new EPF Scheme 2026, replacing the 74-year-old EPF Scheme 1952, and some of the biggest pain points have finally been addressed. • These changes were announced in October 2025, but the government notified them only a few days ago. (effective from 1st July.) • To use these new features, the EPFO portal is being updated. It is expected to go live from 3rd July. • Once the portal is updated, the new withdrawal limits and other changes will start applying. • One more important change: the withdrawal limit for each reason has been reset. For example, if you had already withdrawn twice for marriage earlier, you don’t have only 3 attempts left. From 1st July, your count starts fresh and you can again make up to 5 withdrawals for marriage (subject to EPF rules). The same applies to other eligible withdrawal reasons. • If you leave your job before completing 12 months of EPF membership, you can now make a partial withdrawal, up to your eligible EPF balance. • You can also withdraw 100% of your EPF in certain situations: * If you permanently move abroad or take up employment abroad. * If you are laid off. * On retirement at the age of 55. Good financial decisions start with good information. If you found this useful, share it with someone who has an EPFO account.

Many employees make this mistake with ESOPs. Your ₹50 lakh ESOPs may not actually be worth ₹50 lakh. I used to think of ESOPs the same way. If my company told me, “Your ESOPs are worth ₹50 lakh,” I’d probably feel pretty good about it. But that ₹50 lakh isn’t sitting in my bank account. I haven’t even bought the shares yet. What I actually have is the right to buy those shares at a fixed exercise price. Say my exercise price is ₹100 and the FMV is ₹500. For 10,000 options, I pay ₹10 lakh to exercise them. But the ₹40 lakh difference can become taxable as a salary perquisite. And this is where things get uncomfortable. I can have a tax liability even though I haven’t sold the shares or received cash from them. And if the company is unlisted, there’s another question I’d worry about: What if I pay the tax today but can’t sell the shares for years? That’s why I don’t look at ESOPs as “free money” anymore. Before exercising, I’d want to know: What am I paying? What tax will I trigger? And when can I actually turn these shares into cash? Because the number your company shows you is only the beginning. The real value of an ESOP is what you’re left with after tax, risk and liquidity. That’s the number I’d want to understand before calling it wealth. #wealth #salary #esop

Schlichter Bogard just launched a new ERISA suit dump. If you know Schlichter, you know they dump lawsuits en mass. Well, there was a bunch of coal in United Airlines, Community Health Systems /@Universal Services of America LP, and Laboratory Corp. of America Holdings. Interestingly, this is the first time brokers have also been named. Mercer, Gallagher Benefit Services Inc., Lockton Companies LLC, and WTW Towers Watson US LLC were named for self dealing. Now the question is why? Well, that’s pretty easy. Voluntary benefits should be paid 100% by the participant meaning that the complex issues of redressability and employer contributions mean it’s likely these will look more like the smoking lawsuits than PBM. It’s also a great reminder for fiduciaries to ensure that the voluntary benefits meet the criteria for safe harbor: “29 C.F.R. § 2510.3-1(j), the Plan must meet all four of the following requirements: (1) No contributions are made by an employer or employee organization; (2) Participation [in] the program is completely voluntary for employees or members; (3) The sole functions of the employer or employee organization with respect to the program are, without endorsing the program, to permit the insurer to publicize the program to employees or members, to collect premiums through payroll deductions or dues checkoffs and to remit them to the insurer; and (4) The employer or employee organization receives no consideration in the form of cash or otherwise in connection with the program, other than reasonable compensation, excluding any profit, for administrative services actually rendered in connection with payroll deductions or dues checkoffs.” Additionally, if an employer adds them to a 5500 they become subject to ERISA, which seems like it happened at least with United Airlines. Now, the plaintiffs allege that consideration did occur between the consulting firms (at least) and the benefits meaning they violated the safe harbor. This will be one to watch. And it’s a great reminder that in 2026 if you advise on benefits you probably want to make sure you have some sort of fiduciary insurance. Christopher Vanderwolk, Esq., CEBS Jennifer Stanley Harold (HD) Nations Rachel Strauss ⭐️ Julie Selesnick John Friend Don Rowe Chelsea Ryckis Donovan Ryckis Jake Gepfert Jay Gepfert, RFPs for Retirement/ Health and Welfare Plans Paul Romano

Last Month, one candidate came to me with a big smile. “Madam, I finally got the offer letter. Salary is amazing.” But after joining the company, reality was very different. The “great package” was full of hidden conditions. The bonus was not guaranteed. The probation period was 1 year. Saturday was also working. And the take-home salary was much lower than expected. That excitement turned into frustration within 2 months. An over-promised offer letter often hides important details in small lines. Before accepting any offer, slow down and check everything carefully. Here are 10 important things to verify in every offer letter: 1. Probation period How long is it? What are the conditions during probation? 2. Compensation breakup Check: • Take-home salary • Bonus • Super bonus • Project bonus • Variable pay • CTC vs actual monthly salary 3. Working days Is it 5 days or 6 days working? 4. Notice period 30 days or 90 days? Long notice periods can create future problems. 5. Work location Office, hybrid, or remote? 6. Job role clarity Are responsibilities clearly mentioned? 7. Appraisal cycle When will salary revision happen? 8. Leave policy How many paid leaves are available? 9. Bond or agreement Any service agreement or penalty clause? 10.Hidden clauses Always read the fine print carefully. Many professionals only look at the salary number. Smart professionals read the complete offer letter. Your career decision should be based on clarity, not excitement.

Don't accept an offer letter before confirming these 5 things. Most people sign in excitement. Big mistake. 1] Salary structure Most companies pad the CTC with absurd components like meal vouchers, phone allowances, and retirals. Your in-hand will look nothing like the headline number. Break it down before you sign. 2] ESOP terms (if any) Check the grant size, exercise price, vesting period, exercise window, and forfeiture clause. ESOPs sound great on paper. The devil is always in the fine print. 3] Increment and promotion cycle When does the cycle happen? Are you eligible for the next one given your joining date? Some people join in October and wait 18 months for their first hike. Ask this upfront. 4] Probation and notice period What are the terms of confirmation after probation? And notice period works both ways. A 90-day notice will slow down your next move too. Read both clauses carefully. 5] Variable pay and bonus terms Is part of your CTC variable? What are the conditions to earn it? Some companies show 20% variable in CTC but pay it only on hitting targets you never agreed to. Get the payout criteria in writing. 6] Non-compete clause Some offer letters restrict you from joining competitors for 6-24 months after leaving. In India, these are largely unenforceable, but they can still create friction during your next job search. Know what you're signing. An offer letter is a legal document. Treat it like one. What else do you check before signing? Drop it below.

My friend was “about to become a crorepati” because his ESOPs were valued at ₹10 each. Ten years later, his cash payout is still zero. Here’s what most people miss. → Over 70% of startups never give a meaningful ESOP exit. → Buybacks, when they happen, are usually partial and discounted. → IPO timelines often stretch 8 to 12 years, if they happen at all. Meanwhile, dilution reduces your ownership every funding round. At exercise, tax is paid on notional value, not real cash. ESOPs can create wealth, but they are optional upside, not guaranteed income. Counting them as savings or security is the real mistake. → Take the salary, build liquid assets, and treat ESOPs as a bonus. That mindset saves money, stress, and disappointment later.