companies that have granted employee stock options (ESOPs) have
failed to respond to the downturn in the stock prices. Though a
large number of options are now under water it is surprising that
Indian companies have not responded. In the US, more than 30 per
cent of the hi-tech companies have already re-priced their options,
while barely 8 per cent of the Indian companies have managed to
These are the findings of the nationwide survey conducted by ESOP
Direct on the design practices followed by the companies while structuring
their ESOPs. The 'ESOP Design Practices 2001" survey in the
first such survey conducted in India to understand the trends in
Indian companies. ESOP Direct is an end-to-end ESOP solutions provider
in India and has designed and reviewed the stock option plans implemented
by IT and non-IT companies.
ESOP Direct contacted around 150 companies for conducting this survey.
Responses from 40 companies were used to compile the survey. Of
these, 30 were listed companies and 10 unlisted, while 28 were in
the information technology and software sector and the remaining
from other sectors.
Harshu Ghate, managing director, ESOP Direct, says that despite
the wide coverage and the financial and legal implications, there
is no authentic source of Information about trends and practices
followed by Indian companies in designing their ESOPs.
"While enormous data is available on the global practices,
data relevant to the Indian context is not available, "adds
The survey reveals that around 43 per cent of the IT companies offered
ESOPs to more than 90 per cent of their employees.