Question

Explain the following term/concept.

Employees Stock Option Scheme

Answer 1

(a) Under this scheme, the company offers certain shares from the new issue to the whole time directors, officers, or employees of the company.

(b) The company offers the shares at a predetermined price which is usually less than the price offered to the general public. ESOS encourages employees as they feel proud to be owners of the company for which they are working and company also benefits as it can retain good employees.