ESOPs back as stock markets soar

ESOPs back as stock markets soar: "'The normal way of pricing ESOPs are by taking an average price of shares trading on the stock market for that preceding week,' points out Anand Khare, HR manager, Kale Consultants.
'Strike price is the key for the attraction of ESOPs. If the strike price is high, employees may not find it lucrative as the need for liquidity is high to exercise the option,' he adds.
Anuj Kumar, vice president, HR of Induslogic, says though ESOPs are regaining lost charm, 'people are not giving enough value to it while negotiating salaries, except top management levels. They look at ESOPs over and above competitive salary,' he says.
Normally ESOPs are discounted at around 15 per cent from the market price at the time of grant for listed companies.
For pre-IPO stocks, the revenue is divided by the total shares to arrive at a value.
'The chances of employees creating wealth with ESOPs are more in pre-IPO companies,' says Kumar of Induslogic. While some companies offer ESOP to senior and top management, many companies are now giving ESOPs to employees who have completed more than one years at that particular company.
'At Kale (Kale Consultants), 80-85 per cent of employees are covered at all levels,' informs Khare, HR manager of Kale Consultants."