Employee Stock Option Plans (ESOPs)
What do you mean by Employee Stock Option Plans (ESOPs)?
ESOP is an employee benefit that offers employees and executives an ownership interest in the company they work in. Instead of directly giving the shares of the stock, the company provides derivative options.
ESOPs come with various tax benefits for the sponsoring company, the selling shareholder, and the participants. Often, companies use them as a corporate finance strategy and fine-tune the interest of their employees with that of their shareholders.
Why are ESOPs formed?
Companies usually form ESOP to facilitate succession planning in a closely held company by allowing their employees to buy stocks.
Companies establish ESOPs as trust funds.
ESOP shares are a part of the employee’s remuneration.
The fact that they are a part of the employee’s salary and as the employee owns a part of the company in the form of its shares, employees focus on performing well and wholeheartedly for the company.
This is beneficial from both the employee as well as the employer’s growth point of view.
In simple words, ESOP refers to the employee’s ownership in the company through a share purchase.
ANGCA ESOP Valuation Services
We offer a range of ESOP services, including the following.
- Valuation of options
- ESOP review
- Employee communication service
- ESOP Accounting and Disclosure in the annual report service
So, ESOP services for your company are just a phone call away!