ESOP

                  

#TermoftheDay - ESOP

Dinesh Shah explains ESOP -- employee stock ownership plan
Given to a higher levels of employees where they are offered shares at discount with some lockin

Rohan Vaidya adds that an option provided to employees by the company to buy fixed quantum of equity shares at fixed price. The purpose is to provide extra motivation to employees by giving them chance to participate in profits of the company. For listed entities, the share price may be lower to some extent as compared to market price, which may provide profit opportunity.

Sunil Shinde further adds Employee stock option plan is one of the way company tries to retain talent by rewarding shares at discounted price.

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