The right vehicle for the vision.
ESOPs, RSUs, SARs, or Phantom Shares? Stop guessing and start designing.
Not every company should issue traditional stock options. In fact, defaulting to a standard ESOP without evaluating your specific context is a recipe for strategic friction down the line.
Evaluating the Alphabet Soup
RSUs (Restricted Stock Units), SARs (Stock Appreciation Rights), Phantom Equity—the terminology can be overwhelming. Each instrument carries distinct implications for your cash flow, employee taxation, cap table dilution, and corporate governance.
If you are a bootstrapped, profitable SME with no intention of ever selling or going public, granting traditional ESOPs might create a trap where employees hold illiquid paper with massive tax burdens. In this scenario, a cash-settled Phantom Equity scheme or SARs might align far better with your reality.
The Feasibility Study
We conduct rigorous instrument feasibility studies prior to drafting any scheme. We analyze your corporate structure, growth trajectory, liquidity outlook, and overall philosophy (the "why") to recommend the exact mechanism that will best serve both the founders and the employees.
We don't force you into an ESOP box if you don't belong there. We find the vehicle that safely and transparently carries your intent.
Our Feasibility Assessment Checks:
- Liquidity Horizons: Matching the instrument to your realistic IPO or M&A timeline.
- Tax Efficiency: Finding the most optimal route for both corporate expense deduction and employee tax liability.
- Control Dynamics: Balancing wealth creation with founder control and voting rights.