Many if you come to us asking this very question. If explained in the lay man’s words, an ESOP is an employee stock option that gives you a right (not an obligation) to buy shares of our company at a price fixed on the date of grant.
Absolutely not. Equity based compensations (EC) are many, and it’s finally up to you to choose the right instruments that can provide you with an effective Equity Compensation Plan.
It’s good for you because it can be used as:
Any company has the flexibility to implement Equity based Compensations. In fact, more and more unlisted firms are demanding Equity Compensation plans because they attract & retain more individuals.
It is best for your company you are expecting to grow. Growth can be in the form of:
Employees that prefer to choose an ESOP are far more likely to have a greater sense of ownership than employees who stay away from ESOPs.
“A plan should consider interest of all vested parties “
Misconception: Very often, people fear that by establishing an ESOP, they will lose control over their company. It is not so. On the contrary, ESOPs motivate employees to think like the owner of the company, wherein the control remains with the actual owners.