ESPP clarification
How do I understand company vesting schedule? Company started espp couple years back.
In etrade I see total value of portfolio and dividend value. Every six months there is some announcement for investment.
Every month 20k is deducted from payroll.
I am just confused by this espp.
Usually after every 6 month period, your monthly contributions are combined and your company shares are purchased on behalf of you and vested immediately in your etrade account. So since 20k is your monthly contribution, 1.2 lakh of shares are purchased and vested in your account.
These shares are purchased at a discounted price( depends on your company). Say the contribution period is from Jan to June. In June, share price of jan1st and June 1st are considered, whichever is lower, you get a discount on this price and the equivalent shares are purchased.
Ex: Jan 1st share price is 100 rupes June 1st share price is 80 rupees.
And espp discount is 10%.
So you get a share a 72 rupees. Since share price on June 1st is less and 10% discount is applied on this price. So you get around 1666.66 shares for 1.2lakh. without discount you would have got 1500 shares for 80 rupees.
These are only approx number and general espp policy I have seen across different companies. Reach out to your company HR or manager or seniors for your company espp policy.
Thank you dumbed it down. I understand it. I was confusing it with RSU and a later vesting period. It is vested immediately on the purchase date I see
