EMPLOYEE STOCK

OPTION PLAN

Mamata Parab
KCCMS
WHAT IS ESOP??
 Employee stock option plan (ESOP) is aimed at offering
shares to the employees of a company, wherein
promoters decide to dilute their stake.

 Give employees a stake in the ownership of the

company, are provided by the company to employees to
boost their motivation and loyalty.

 Give an employee the right to buy the company's shares

during a predetermined time period and at a
predetermined price (strike price).
USES OF ESOP
 To buy the shares of a departing owner

 To borrow money at a lower after-tax cost

 To create an additional employee benefit

VARIOUS FACTORS
 Structuring of ESOP
 Is it a mere retention policy?

 Financial Implications to the company and the

employees
 When do companies offer ESOP?

 No transfer of rights for the ESOP to anybody else.

THANK YOU