ESOPs have emerged as a popular tool and are being employed by more and more companies to retain and motivate their key employees. But despite the increasing popularity of ESOPs, many organisations do not truly understand the basics involved in owning and operating an Employee Stock Ownership Plan.

Launching of successful stock ownership plans involve various considerations, which must be well-thought-out during the design and implementation stage. Click on the link below to access our editorial on 5 key design considerations that any organization launching an ESOP scheme will find relevant.

Click on the link below to access our short presentation on “Designing Successful ESOP Program”:

https://www.veritas-india.com/pdf/designing-successful-esop-program.pdf

This presentation is a 5-minute read highlighting the importance of launching your ESOP scheme the right way. The key considerations have been summarized below for your ready reference.

  • ESOP Pool Philosophy
    Manage Dilution vs. Value Creation
 
  • Defining Grant Framework
    Who to give? How much to give? When to give?
 
  • Defining Grant Framework
    Who to give? How much to give? When to give?
  • Optimising Cost vs. Wealth Creation
    Maximise wealth whilst minimizing cost
 
  • Critical Non-Financial Aspects
    Keeping the scheme flexible and avoiding issues in future

Launching an ESOP scheme involves balancing varied stakeholders’ interests, often an iterative process, and something we at Veritas specialize in doing.

Should you have any comments or thoughts or feedback, please feel free to share write to us. We would love to hear from you!

Vichitra Malhotra, FIAI

Founder and Consulting Actuary

v.malhotra@veritas-india.com

+91-9372876627

Disclaimer:The above content has been furnished solely for information and must not be reproduced or redistributed. It should be noted that we are not soliciting any action based upon it. Also, it does not constitute any recommendation. In particular, the information above is for general purposes only and is not an advice on employee stock option solutions valuations or preference of one scheme over another. The information given above is in summary form and does not purport to be complete. We have reviewed the above and in so far as it includes information or facts, it is believed to be reliable though its accuracy or completeness cannot be guaranteed.