A Study on ESOP Framework in India
Author : Gino Raj D and Dr. S Maruthavijayan
Abstract :
Employee Stock Ownership Plans (ESOPs) have emerged as a significant tool in India for aligning employee interests with organizational growth. ESOP was initially introduced as a form of incentive for the employees and to retain employees in the organiszation, ESOPs are now widely adopted across industries, particularly in start-ups and technology-driven sectors. This research critically examines the framework of ESOPs in India, focusing on their legal, regulatory and practical aspects, while placing special emphasis on their impact on employees. The study explores whether ESOPs truly benefit employees in terms of wealth creation, job satisfaction and long-term security or whether they primarily serve organizational interests by deferring compensation and mitigating attrition. Drawing on secondary data, case studies and survey responses, this project seeks to identify the actual effectiveness of ESOPs as a motivational and financial tool for employees. The findings aim to contribute to the ongoing discourse on ESOPs by highlighting both the opportunities and challenges within the Indian framework, offering insights for policymakers, organizations and the workforce at large.
Keywords :
Employee Stock Ownership Plans (ESOPs), Employee retention, Organizational growth, Wealth creation, Regulatory framework, Employee motivation.
