ESOP Direct

Plan Design, Implementation & Roll-out

The designing of an Equity based compensation scheme goes through three stages - Conceptualization, Consummation and Communication. Since all these three stages have an exponential impact on the workability of the ESOP Scheme, we call it ' The C3 Model ' instead of ' The 3C Model '.


The deliverable of this stage is a conceptual framework of the plan that will achieve the organisational objectives. Equity compensation has a lot to do with the corporate philosophy. What are the strategies for achieving corporate objectives and where and how does equity compensation fit in to execute those strategies? We work with the compensation committee and senior management to identify these linkages and conceptualization contours of the plan.


On receiving a go ahead from the senior management the hi-level framework, needs to be drilled down to finer aspects of plan design. Applying company specific expectations and bench-marking with industry trends and best practices forms the core deliverable of the stage.

The plan document along with necessary shareholder and board resolutions are the other important deliverables of the stage.
In case the plan is to be implemented through the trust route, creation of the trust is also achieved in this stage.


This is an extremely important, but unfortunately often ignored, element in the success of an ESOP plan. It is critical for the employee to see the value of what he is getting as options/shares. This communication on awareness/education is especially needed if the company is unlisted. To make an employee feel like an "owner", efforts should be made to provide him with relevant financial information about the company, and also to ensure that such information is well understood and appreciated. Employees should be educated to view stock options as a long term instrument that would provide value over a horizon of 3 - 4 years. We conduct interactive sessions with the employees to make them aware of the value and opportunity made available to them.