Question

Justify the following statement.

ESOS is offered by a company to its permanent employees, Directors and Officers

Answer 1

Justification:

1. Employee Stock Option Scheme (ESOS) is a scheme, through which a company encourages employee participation in the business of a company.
2. Under this scheme, the company offers certain shares from the new issue to the whole time directors, officers, or employees of the company.
3. The company offers the shares at a predetermined price which is usually less than the price offered to the general public.
4. ESOS must be approved by passing a special resolution in the general meeting. Thus, it is rightly justified that, ESOS is offered by a company to its permanent employees, Directors, and Officers.