ESOP Direct in News - Press Reports
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ESOPs ALIVE & THRIVING IN NON-IT COs TOO
News Financial Express - April 23rd , 2004
When Infosys Technologies suspended granting of fresh stock options to its employees, Harshu Ghate received numerous calls from nervous companies wanting to know if everything was fine with ESOPs and anxious to find out why Infy was doing so? But, for once, the rest of the industry is not out to emulate Infosys. -
ESOP DIRECT AND TRANSCENTIVE FORM CO-MARKETING ALLIANCE
Press Release - September 30th , 2002
Pune, India and Shelton, Conn. -September 30, 2002 - ESOP Direct, a provider of end-to-end Employee Stock Option Plan (ESOP) solutions, has formed a strategic alliance with Transcentive, Inc., the leading provider of software and outsourcing services for stock plan and global entity management. ESOP Direct and Transcentive will market Transcentive's global offerings in conjunction with ESOP Direct's administrative services-providing international marketing opportunities for both companies. ESOP Direct and Transcentive customers that have a presence in both countries will become joint users of both companies' offerings, benefiting from the global power of Transcentive OptionsTM, the first solution for global stock option plan management released today. ESOP Direct will provide back-office administration support for joint customers. -
THE COUNTERVIEW
Business World - August 19th , 2002
I believe there is too much unnecessary debate on (compulsory) accounting vis a vis just disclosing. Since the disclosures of the impact are adequate and the earnings are reported on diluted equity, disclosures are fine. The core issue is about the quantum (of the impact). A difficult but unavoidable task. The existing valuation models (Black Scholes and other binomial models) have been designed for valuing traded options, whereas employee stock options (ESOPs), by definition, are non-transferable. Traded options also have a much shorter life (normally less than three years) whereas an ESOP would have a life of around 10 years. Given these basic differences the assumptions and variables used in these models, they cannot be used for valuing ESOPs. For instance, one of the variables is volatility in the stock prices. Predicting volatility for a 10 year option is far more difficult and risky than predicting it for a 3-month or 6-month option. Same is the case with the expiry life. A normal ESOP has a life of 10 years, which is reduced based on the estimated percentage of forfeiture/lapses. -
BUDGET PROVISIONS ON ESOPS WILL OPEN A PANDORA'S BOX
FE COLUMN - June 2nd , 2002
Budget presented by the finance minister has significant provisions that affect the employee stock option plans (ESOPs) designed and implemented by companies. Amongst the couple of other provisions relating to ESOPs, one, which has wider implications, is the amendment suggested to proviso to sub-clause (iii) of Section 17(2). The amended clause now provides that unless the issue of options is in accordance with SEBI guidelines the benefit to the employee will be treated as a perquisite. The suggested change has significant tax implications, especially for companies that have not complied with SEBI guidelines (i.e. unlisted and foreign companies) and listed companies that issued options before SEBI guidelines became effective. -
ESOPS TURN INTO LOSING OPTION AS SHARES DIP 'UNDERWATER'
The Economic Times - January 2nd , 2002
GLOBAL TREND OF SELECTIVE RE-PRICING YET TO CATCH UPEsops turn into losing option as shares dip ' underwater 'THE ECONOMIC TIMES 2 JANUARY 2002 Employee Stock Option Plans (Esops) were currency till a short while ago; they were also seen as signs of the Indian corporate sector accepting global compensation practices. With the high profile IT sector in a downturn, what happens to the options which have gone underwater?- Gouri Agtey Athale -
HOLDERS ALIVE TO UNDERWATER ESOPS
The Economic Times - December 27th , 2001
EMPLOYEE stock option plans were currency till a short while ago; they were also seen as signs of the Indian corporate sector accepting global compensation practices. With the high profile IT sector in a downturn, what happens to the options which have gone underwater? -
ESOPs: IS THE PARTY OVER?
Human Capital Volumn 5 No. - December 7th , 2001
In the recent past a lot has been written about how ESOPs is all hype and no substance. Corporate managements have been blamed for taking the employees for a ride by creating unrealistic expectations about the value of the options they hold. Press reports highlighting how the options are not even worth the paper they are written on are regularly seen. So is it all over for employers and employees as far as their ESOPs are concerned? Should companies discard their ESOPs and look out for some new incentive mechanism? Will ESOPs never work in the Indian environment? Will the fate of ESOPs swing with the ups and downs in the Software industry? There are several questions being raised. There is a need to look at this instrument in a proper perspective. -
FAITH HEALERS
Business World - October 29th , 2001
Is your employer hoping the underwater stock options problem will just go away? He's not the only one it seemsWhat goes up must come down. Stand this cliche on its head, and what do you get? The standard policy most Indian corporates are adopting to deal with underwater stock options. They... hey, hang on a minute! What are underwater options? Okay, let's tarry a bit and deal with the jargon first. Underwater Esops are options with an exercise price much higher than the share price. Net result: they are worth their weight in, well, paper. Exercising them is not a good idea unless you want to bankroll your company's latest dotcom plans. -
NO MORE THE HONEY
Dataquest - October 15th , 2001
Once carrots that attracted talent, ESOPs are now well and truly dead. However, even though it’s been a while since stock prices fell, a survey shows that 92% of companies are yet to rethink their ESOP policies Nanda Kasabe -
INDIAN FIRMS NEED TO REVIEW STOCK OPTION TO BEAT DOWNTURN:ESOPDIRECT
Financial Express - May 15th , 2001
Indian 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 do so.