For many corporate professionals, ESOPs feel like a reward for loyalty.
They symbolize growth, trust, and long-term success.
But sometimes, loyalty can quietly turn into risk.
Let me share a real case.
The Client Story
A 35-year-old IT professional working at Accenture had accumulated 800 shares over the years through ESOPs.
She had built her career steadily — promotions, bonuses, recognition.
Her ESOPs felt like a badge of honor.
When we reviewed her portfolio, one number immediately stood out.
More than 60% of her total net worth was invested in a single stock — her employer’s stock.
That meant:
- The same company is paying her salary
- The same company is providing her benefits
- The same company is determining her career growth
Was also responsible for most of her wealth.
The Risk No One Talks About
When the stock was trading around $320, we recommended a partial exit.
Not because we were negative on the company.
Not because we expected a crash.
But because the concentration risk was too high.
The strategy was simple:
- Book partial profits
- Reduce exposure
- Diversify across asset classes
The goal was wealth protection.
The Emotional Decision
But investing is rarely just numbers.
There was attachment.
“This company built my career,” she said.
“I believe in it.”
So she held on.
Then came a market correction.
Not a collapse.
Not a scandal.
Just normal market volatility.
But when 60% of your wealth is in one place, even a routine correction hurts.
Today, that decision reflects a notional loss of over ₹50 lakhs.
The Bigger Lesson
Here is the core issue many professionals overlook:
If your employer controls your income and also dominates your investment portfolio, you are doubly exposed.
If the company or sector slows down:
- Your income growth may slow
- Your ESOP value may fall
One risk. Two impacts.
This is what we call the Loyalty Trap.
Wealth Creation vs Wealth Protection
There is nothing wrong with concentration.
In fact, wealth is often built through concentration.
But it is protected through diversification.
Belief in your company is admirable.
But financial planning must go beyond belief.
It must focus on risk management.
Final Thought
If a single stock represents more than 30–40% of your portfolio, it may be time to review your allocation.
Because financial freedom is not built on loyalty alone.
It is built on strategy.
