2. SEMINAR ON HRM
Topic: Employment Stock Ownership Plan
Presented by
Jibson Abraham Varghese
MBA II Semester

3. ESOP
Under Stock Option Plan, The Eligible Executives Are Allotted
Company’s Shares (Sweat Share) Below The Market Price.

4. Features of ESOP
• It is a voluntary in nature.
• It helps to buy shares or stock at a stated price or in the present
at a price lower than the market price.
• It is intended to procure and hold talented professional
employees.

5. Conti…
• It makes the employee a part-owner of the company where he is
working.
• Mutuality of interest is created between the individual and the
company.
• Stocks are held in trust until employee choose to withdraw from
the plan or leave the company.

6. Advantages of ESOP
• It promotes mutuality of intrest between the employee and the
employer.
• The employee get an opportunity to attend the meetings of the
shareholders and know about future plans.
• It promotes efficiency and security on the part of the employees.
• Worker’s income is supplemented by dividends.
• Gains to the management.

7. In India
• Employment Stock Option Scheme (ESOS)
• Participation of employees in the shareholding is encouraged.
• Allots shares on:
i. Every financial year.
ii. Reservation in fresh issue.

8. Conti…
• The SEBI guidelines for Disclosure and Investor protection explain
that ESOS is a voluntary scheme on the part of the company to
encourage participation in the company.
• 5% reservation for the employees
• Max. limit- 200 shares
• Membership restricted to permanent employees.

10. References
• The Economic Times, Thursday 14 May.
• T.P Ghosh, Compensating Employees by ESOP, Express Investment
Week, New Delhi.