Employee Stock Option Plan (ESOP) simply means a plan where the company grants options to their employees.
While giving ESOP's option, the selling shareholder and participants obtain numerous tax benefits. It not only keeps worthy employees inspired which helps to grow your company, rather than just accomplish their obligations, it guarantees that you don't lose them for a number of years.
It shall apply to any company whose shares are listed on any stock exchange in India.
You may not be able to match their current salary, but an offer of shares in your company will be enough to attract the best talent.
The better your business performs, the better your most talented employees will get paid. There's no better way to motivate them.
The employees to whom shares have been allocated are almost certain to complete the two to three years you have defined as vesting period.
An employee who is a promoter or a part of the promoter group will not be entitled to participate in the Employee Stock Option Plan of the company.
A director who holds in excess of 10% of the outstanding equity shares of the company either by himself or through his family or through any investment company, directly or indirectly will not be qualified to take part in the Employee Stock Option Plan
The ESOP shall be approved by the shareholders by a special resolution.
Other criteria will come into picture like: