30 Mar 2018

Employee Stock Ownership Plan (ESOP)

Finance feed by:

CA Akash Agarwal
B.com (Hons),CA
CA in Practice    •    100% (2 votes)   •    12 Year 1 Month  experience

Employee stock ownership plan is to provide benefits to employees in long term.
Under these plans, the employer gives certain stocks of the company to the employee for negligible or less costs which remain in the ESOP trust fund, until the options vests and the employee exercises them or the employee leaves/retires from the company or institution.

These plans are aimed at improving the performance of the company and increasing the value of the shares by involving stock holders, who are also the employees, in the working of the company. The ESOPs help in minimizing problems related to incentives.

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