Site Search

Course Navigation

Home| Course Catalog| Career Planning

FREE online courses on ESOP - Understanding ESOP - Concept of ESOP in India




However, it is only during the last few years that there have been any publicly acknowledged and legally sound versions of equity-linked plans. Strictly speaking, all the plans, other than those that may have been initiated under the SEBI guidelines for the ESOS, are not option plans, as these do not involve “options” as instruments. There is a need to make this distinction - as all stock related plans are not necessarily option plans.


There have been several one-time offers to employees while raising equity or as preferential allotments, but these are mere precursors to more advanced and structured plans that we notice now.  Prominently quoted examples of such structured equity linked plans are those of Infosys Technologies, Global Trust Bank, Sat yam etc. There has been a discernible concentration of the I.T and Finance / Banking companies in this experimentation so far, due to the special manpower and compensation dynamics that they have been passing through.  However, several in the manufacturing, both in the private and the public sector are evaluating the merits of this instrument, which appears inevitability. Further, the reference to stock options in the last two Budget presentations by the Finance Minister has sparked a surge in the interest of corporate, both public and private.


The guidelines issued by the SEBI, despite several contentious issues, have come as a good step in the direction of promoting stock option plans.  The amendments to exchange control regulations of the RBI and guidelines in respect of stock options linked to ADR / GDR issues have also contributed to the swift progress in the spread of this knowledge and technique.


Why do we need such policy directions and regulations?


The stock option plans can have a great bearing not only on the employees but also on the control, governance, accounting, risk, disclosure / reporting and related issues. A one-time offer of shares to employees by which they accept or reject within a stipulated time-period is a simple method. It also would have very simple objectives. The more complex the objectives, the more complex would be the plans and more would be the legal and regulatory issues. Thus, a stock option can achieve several objectives than that of a simple one-time offer.


A stock option is an opportunity to buy stock at a set price, sometime in the future… The term ‘stock option' means the right or privilege to buy stock under an offer continuing for a stated period of time.




Our Network Of Sites:
Apply 4              |  |  |
Anatomy                | Anesthesiology  | Architecture | Audiology
Cardiology            | Computer Science| Computer Science| Dermatology
Epidemiology         | Gastroenterology  | Hematology     | Immunology
IT                | Kinesiology  | Language  | Music
Nephrology             | Neurology  | Neurosurgery | Obstetrics
Oncology    | Ophthalmology | Orthopedics       | Osteopathy
Otolaryngology| Pathology  | Pediatrics  | Physical Therapy
Plastic Surgery| Podiatry  | Psychiatry   | Pulmonary 
Radiology| Sports Medicine| Surgery | Toxicology
US Law| US Med | US Dental

About Us Terms of Use | Contact Us | Partner with Us | Press Release | Sitemap | Disclaimer | Privacy Policy

©1999-2011 OpenLearningWorld . com - All Rights Reserved