So, there are so many intricacies to Navigating the details of an offer in Africa. Some organizations offer benefits like Health Insurance, Travel Allowance, Paid Leave, Educational Budget, and so on. However, some take it a step further by offering you a piece of the company a.k.a an Equity offer.
That’s the real clincher but I wouldn’t get too excited if I were you. Do you even know what an equity offer means? And are you equipped with adequate knowledge to help you maximize this benefit?
An Equity Offer is also known as ESOP – Employee Stock Ownership Plan. An ESOP is a benefit plan that gives employees an ownership interest in the company; either as shares or stocks. In simpler terms, you own a part of the company. This practice is most common among start-ups and is used to build the company and get the employee equally interested in the growth of the company.
Imagine owning stocks at Flutterwave or PayStack before it blew up? Easy Money Bag!!!
If you work in a startup, an ESOP benefit will definitely get you to think long term especially if the place has prospects. This means that you have a future economic benefit to look forward to, have a proper insight into the company’s decisions and plans; also it’s untaxed till you retire – that sounds good I am not going to lie.
While I’ve revealed all the good stuff, employees sometimes shy away from this benefit because it can be very tricky. It sometimes seems like you’re sacrificing scouting for ‘what is’ [better opportunites] for ‘what could be’ [Company growth].
What if the company shares never increase? What if it depreciates in value or the company goes bankrupt? That’s a big loss after staying there for years.
These are tough questions to ask yourself. Also, read your contract very carefully, in fact, get a Lawyer if you can before you sign anything. The Terms of ESOPs differ from company to company so just to be sure you are not losing out.
Ready to sign that offer letter? Let me know.