ESOPs Fables

Not long ago, the robust growth in India’s economy and corporate profits had given rise to an intense war for talent. Smart people were hard to find, harder to keep. Companies tried ever newer ways to reward the best among their staff. But their most effective tool — a golden handcuff, if you will — has been the employee stock option plan (ESOP).

Over the last decade, employee ownership has spread. For the employee, it was the quickest route to the millionaire club. For the employer, it was the trump card of staff motivation with little burnout of cash. But after two tumultuous years that has seen the stock market plunge and recover — both in record time — ESOPs are at a crossroads.

Our special report on ESOPs throws light on these changes. We tell you how India Inc. is evolving employee ownership schemes through these tough times. The first round during the boom period was marked by too much optimism, the second round now by too much pessimism. But hopefully, ESOPs will enter the age of realism and emerge a stronger compensation tool.

Based on an analysis of listed companies and their ESOP plans, the package reveals corporate India’s journey so far — the early adopters, big users and the lessons they have learnt. How do they choose the employees to cover and what is the motive? What are some of the most defining features of plans being offered in India? How can the government affect the gains from ESOP? And most importantly, how can you, as a smart executive, play the game well and make the most of your stock options?

We, at Forbes India, worked closely with ESOP Direct, a specialist consultancy firm that has helped many companies put together successful plans.

The stories listed below are all parts of our special report.

- ESOPs: Back in Fashion

- A SOP story

- ESOPs are more complex than they seem, but are here to stay

- The Different Ways to Make ESOP work

- Even ESOPs Have a Flipside, Are You Prepared?