Employee Stock Ownership Plans (ESOPs) :-
         Under the Employee Stock Ownership Plans (ESOPs), employees are offered the company’s shares at a concessional price. When the market price f the shares increases, the employees earn substantial capital gains (difference between purchase price and the current market price). Stock options are regarded as performance based incentives. ESOPs are becoming popular particularly in Information Technology (IT) firms. ESOP scheme is implemented with proper planning and gives financial benefit to employees even when they leave their jobs in the company.
         Merits / Benefits of ESOPs :
(1)Â Â Â Â This scheme enables a company to retain efficient / capable employees with the company.
(2)Â Â Â Â It links compensation package closely to employee performance.
(3)Â Â Â Â This scheme encourages the employees to work efficiently and to show better performance.
(4)Â Â Â Â It develops a sense of ownership and responsibility among the employees.
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