A start-up founder’s LinkedIn post has sparked discussion online about how many companies inflate cost-to-company (CTC) figures, to make job offers appear more lucrative than they actually might be.
BlockseBlock founder, identified as Sahil Thakur, shared a story of how one of his students had recently received an offer from a Mumbai-based start-up with an annual CTC package of ₹18 lakh.
Thakur said the student seemed elated and celebrated with joy, posting about the feat online and even informing his parents. However, a closer look at the salary structure provided a different look, Thakur said.
In-hand salary v/s CTC
Thakur revealed that the student’s base salary was only ₹6 LPA (roughly amounting to ₹50,000/per month). The rest of the ₹12 lakhs were what he termed “imaginary”, as the amount was tied to a set of conditions that could easily not materialise.
The offer reportedly included a ₹4 lakh “performance bonus,” but Thakur claimed the targets were structured so that only about 10% of employees could achieve them. Another ₹3 lakh was listed as a “retention bonus,” which is payable only after 2 years.
“Most people quit in 18 months,” Thakur wrote.
The remaining ₹5 lakh consisted of employee stock ownership plans (ESOPs), valued at the company’s current funding round. “If the company doesn’t exit or IPO, they’re worth ₹0,” he wrote.
“[Companies] inflate the CTC with bonuses you’ll never get and equity that might never vest. Because ₹18 LPA sounds way better than ₹6 LPA on LinkedIn. And most freshers don’t know to ask for the breakup,” he added.
Thakur said he told the student that he is only making “₹6 LPA with a lottery ticket.”
“He’s still taking the job. Because ₹6 LPA is still decent. But at least now he knows what he’s actually getting,” Thakur said.
‘Ask for the CTC breakup’
Cautioning job seekers, Thakur wrote that they should always ask for the breakup of their compensation. “Check what’s guaranteed vs what’s conditional. Ignore ESOPs unless the company is close to IPO. And stop comparing total CTC numbers with your friends…Compare what actually hits your bank account. That’s the real salary,” he added.
Netizens weigh in
The post sparked a discussion between professionals, many of whom shared similar experiences.
“The ESOPs remind me of my old company where the founder promised ESOP to every confounding team member including me, but we never got it,” one user wrote.
“Forget about freshers, there is a decent % of laterals who don’t know about their CTC breakup,” another user wrote.