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Employee Ownership & Incentives

Attract & Retain Top Talent with
Strategic Equity Plans.

In today's competitive market, Employee Stock Option Plans (ESOPs) are a powerful tool to attract key talent, align incentives, and foster a culture of ownership. We provide end-to-end advisory to design and implement a compliant and effective equity plan for your company.

Design My ESOP Scheme
Custom Scheme Design Regulatory Compliance Valuation & Tax Advisory
Our End-to-End Framework

Our 6-Step ESOP Implementation Process

A comprehensive approach from initial strategy to ongoing management.

1

Goal Alignment

We understand your goals—be it retention, rewarding performance, or attracting leaders—to define the core ESOP strategy.

2

Scheme Design

We structure the ESOP, defining the option pool size, eligibility, vesting schedule, and exercise price.

3

Company Valuation

We arrange a mandatory valuation by a qualified professional to determine the fair market value of shares.

4

Legal Documentation

Our team drafts the ESOP Scheme documents, grant letters, and necessary Board and Shareholder resolutions.

5

Implementation

We guide you through the formal adoption of the scheme and the process of issuing grant letters to employees.

6

Ongoing Management

We provide support for managing the ESOP pool, tracking vesting, and advising on tax implications upon exercise.

The Reality

Strategic Edge vs. Operational Realities

Understanding why ESOPs are a game-changer for growth companies.

Strategic Edge

A well-designed ESOP is a powerful tool for building a high-performance culture.

  • Win the Talent War: In a competitive market, a meaningful ESOP is a major differentiator for attracting and retaining top-tier talent.
  • Aligns All Incentives: It turns key employees into owners, fostering long-term thinking and a direct stake in the company's success.
  • Conserve Precious Cash: Allows early-stage startups to offer highly competitive compensation packages without draining their cash reserves.

Operational Realities

Implementing an ESOP requires navigating complex legal, tax, and valuation rules.

  • Complex Legal & Tax Rules: ESOPs are governed by the Companies Act and have complex tax implications for both the company and the employees.
  • Formal Valuation is Mandatory: The exercise price of options must be based on a fair market valuation from a Registered Valuer, a critical compliance step.
  • Causes Ownership Dilution: Founders and existing investors must be prepared for the dilution of their ownership stake when an ESOP pool is created and options are exercised.
Build an Ownership Culture

Build a Culture of Ownership in Your Company

Empower your team and fuel your growth with a professionally designed Employee Stock Option Plan. We handle all the complexities, from valuation and legal drafting to tax advisory.

Attract
Top Talent

Drive
Performance

Expert
Guidance

Ready to make your employees partners in your success?

Fill the form for a free consultation on designing your ESOP scheme!

Questions Answered

Frequently Asked Questions

Key information about ESOPs and ESPS

An ESOP (Employee Stock Option Plan) gives employees the right (but not the obligation) to buy company shares at a predetermined price in the future. An ESPS (Employee Stock Purchase Scheme) allows employees to purchase company shares directly, often at a discounted price. ESOPs are more common for startups as a long-term incentive.

Vesting is the process by which an employee earns the right to their stock options over time. A typical vesting schedule is 4 years with a 1-year "cliff," meaning the employee gets 0% if they leave within a year, 25% after the first year, and then the rest vests monthly or quarterly over the next 3 years.

The exercise price (or strike price) is the fixed price per share at which an employee can purchase the company's stock once their options have vested. This price is determined on the date the options are granted and is typically based on the fair market value of the shares at that time.

There are two tax events. First, when an employee exercises their options, the difference between the Fair Market Value (FMV) and the exercise price is taxed as a perquisite (like salary). Second, when the employee later sells the shares, the difference between the sale price and the FMV on the exercise date is taxed as capital gains.

For early-stage startups, a typical ESOP pool is between 10% and 15% of the company's total equity. This pool is usually set aside before a major funding round and is used to grant options to key hires over the next few years.

Yes. To comply with Indian regulations and tax laws, the exercise price of the options must be set at the Fair Market Value (FMV) of the shares on the grant date. This FMV must be determined by a valuation report from a qualified professional, such as a Registered Valuer or a SEBI-registered Merchant Banker.