At the core of launching a successful ESOP scheme is getting the mathematics right for all stakeholders viz. shareholders, company as well as the employees. Yet, we see most companies focus more on administrative and secretarial aspects.

An ESOP program is essentially a medium to long-term wealth creation plan, which has relevance even after more than five to seven years from the date of launch. And over such a long period, business, like life,

A key decision in launching an ESOP scheme is the price at which you should offer your shares i.e., the Exercise Price. It is the price the employee will eventually pay to receive the shares and monetize the gain on their ESOPs.

Vesting Criteria is one of the biggest levers available in an ESOP scheme to drive the right employee behaviour. It is also something that significantly impacts the level as well as pattern of charge to the income statement.

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.

If you have been following our updates, you would know that we strongly believe in getting mathematics and risk management right when launching your ESOP Program.

When it comes to implementing stock-based compensation, the choice is really between choosing Equity-Settled Instruments (such as ESOPs or RSUs) or Cash-Settled Instruments (such as SARs or Phantom Stocks)

Founders of many start-ups as well as established unlisted companies often ask us ‘if this is the right time for us to launch ESOPs?’ Or that ‘we are not listed - do ESOPs even make sense for us?