ESOP by unlisted companies

[Darshana Kakani]

On what basis/criteria unlisted companies decide their exercise price and group of employees to whom options are granted for ESOP scheme? please describe ?

[Darshana Kakani]

please reply

On Sat, Mar 11, 2017 at 5:32 PM, Darshana Kakani <darshan...@gmail.com> wrote:

On what basis/criteria unlisted companies decide their exercise price and group of employees to whom options are granted for ESOP scheme? please describe ?

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[CS. JAYANT SUTHAR]

PFA

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Jayant Suthar

M.Com., FCS, ACMA

[Ascend Management Consultants]

The exercise price and group of employees are decided based on the purpose for which the scheme is being formulated. Assuming a Company has high employee turnout ratio at senior management level, then the senior management alone may be the employees who are covered by the scheme. 

The exercise price is determined based on the benefit which the Company wants to pass on. Assuming the Company decides to allot 10% to employees aggregating to 1,00,000 options. The Company wants the employees to get a benefit of 50 Lacs and the fair value of the Company is 200 Rupees. The Excercise price would be 200 - 50 (50Lacs/1 Lac) = 150. 

Regards, 

L.V.Shyam Sundar

On Tue, Mar 14, 2017 at 10:40 AM, Darshana Kakani <darshan...@gmail.com> wrote:

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L.V.Shyam Sundar

Director 

Ascend Management Consultants

& Advisors Private Limited 

Mob: 93802 84913

www.connectascend.com 

Think before you print: please consider our environment before printing this e-mail.

[Darshana Kakani]

Thanks sir but need more clarification.