{"id":1465,"date":"2021-04-01T04:35:51","date_gmt":"2021-04-01T04:35:51","guid":{"rendered":"https:\/\/www.akgvg.com\/blog\/?p=1465"},"modified":"2021-04-02T07:29:17","modified_gmt":"2021-04-02T07:29:17","slug":"esop-to-incentivize-increase-productivity-of-the-employees","status":"publish","type":"post","link":"https:\/\/www.akgvg.com\/blog\/esop-to-incentivize-increase-productivity-of-the-employees\/","title":{"rendered":"Esop To Incentivize &#038; Increase Productivity Of The Employees"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"683\" src=\"https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2021\/04\/shutterstock_164852162-1024x683.jpg\" alt=\"\" class=\"wp-image-1466\" srcset=\"https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2021\/04\/shutterstock_164852162-1024x683.jpg 1024w, https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2021\/04\/shutterstock_164852162-300x200.jpg 300w, https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2021\/04\/shutterstock_164852162-768x512.jpg 768w, https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2021\/04\/shutterstock_164852162-1536x1024.jpg 1536w, https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2021\/04\/shutterstock_164852162-2048x1365.jpg 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p><strong>Employee stock option plan<\/strong><\/p>\n\n\n\n<p><strong>Definition<\/strong><\/p>\n\n\n\n<p>According to the Section-62 of the Companies Act, 2013 employee means-<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Permanent employee of the company.<\/li><li>Director of the company except for the independent director.<\/li><li>An employee of a subsidiary and holding of a company.<\/li><li>Except for the person who is anemployee promoter and related to the group of promoters.<\/li><\/ul>\n\n\n\n<p><strong>Applicability<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Listed companies need to comply with the Security Exchange Board of India (SEBI) regulations and Companies Act 2013.<\/li><li>The companies which are unlisted need to fulfil the conditions of the Companies Act 2013.<\/li><\/ul>\n\n\n\n<p><strong>Advantages of ESOP<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Stock options are provided by the company for the benefit of employees of the company.<\/li><li>It is a kind of incentive thatpromoteshard work and gives motivation to the employee.<\/li><li>ESOP gives retirement security to the employees which holdsthe company for a long period.<\/li><li>Employees are not taxed on the amount contributed by the employer to the ESOP.<\/li><li>ESOP can be used to increase the new equity for the company.<\/li><li>ESOP gives benefits to both employer and employee and it makesa positive impact on the company in profitability, productivity, and performance.<\/li><li>ESOP is anattractive benefit to the employee and company.<\/li><\/ul>\n\n\n\n<p><strong>According to the companies Act, 2013 followings are the conditions:-<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Companies need to make an explanatory statement that contains all the details about the ESOP and pass the resolution in the board meeting.<\/li><li>Then the company needs to take the approval of the shareholders in the general meeting by passing the special resolution.<\/li><li>There shall be a minimum period of one year between the grant of option and vesting of the option.<\/li><li><strong>Grant of option<\/strong> means right to acquire the number of shares of the company.<\/li><li><strong>Vesting of option<\/strong> means the period until you need to hold the stock option.<\/li><li>The option grants to the employee which are not transferable to the other person.<\/li><li>The board of directors disclose the Director\u2019s Report containing the details of ESOP during the year.<\/li><li>The company maintains the register of ESOP in Form no. SH-7.<\/li><\/ul>\n\n\n\n<p><strong>This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise.&nbsp;<a href=\"https:\/\/www.akgvg.com\/\">AKGVG &amp; Associates<\/a>&nbsp;does not intend to advertise its services through this.<\/strong><\/p>\n\n\n\n<p>Posted by: CA Neetu Saini<\/p>\n\n\n\n<p><a href=\"https:\/\/www.akgvg.com\/\"><strong>AKGVG &amp; Associates<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Employee stock option plan Definition According to the Section-62 of the Companies Act, 2013 employee means- Permanent employee of the company. Director of the company except for the independent director. An employee of a subsidiary and holding of a company. Except for the person who is anemployee promoter and related to the group of promoters&#8230;.<\/p>\n","protected":false},"author":1,"featured_media":1466,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[120],"tags":[477,323,343,463,476,469,473,277],"class_list":["post-1465","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-secretarial-services","tag-advantages-of-esop","tag-akgvg","tag-akgvg-associates","tag-cafirm","tag-esop","tag-secretarial-audit","tag-secretarial-service","tag-secretarial-support"],"_links":{"self":[{"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/posts\/1465","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/comments?post=1465"}],"version-history":[{"count":2,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/posts\/1465\/revisions"}],"predecessor-version":[{"id":1477,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/posts\/1465\/revisions\/1477"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/media\/1466"}],"wp:attachment":[{"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/media?parent=1465"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/categories?post=1465"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/tags?post=1465"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}