5th National Annual Survey on ESOPs from ESOP Direct

ESOP Direct, a leading solutions company in the space of Equity based compensation in India announced the results of their fifth annual survey – Equity Compensation trends 2012.

The survey, conducted by ESOP Direct, included responses from 117 Indian Companies (includes both listed and unlisted categories).

“It is our fifth annual survey covering the entire gamut of issues faced by companies while designing and managing Equity Compensation Plans in India. Wherever possible we have also benchmarked Indian practices with those in the US to give a global context to the findings,” said Harshu Ghate, Co Founder & CEO of ESOP Direct.

Some of the key findings of the Survey are:

-- An overwhelming 89% percent of companies said that their equity based compensation plans have achieved the objectives of implementing ESOP Plans.

-- Retention and Reward continue to be topmost reasons why companies grant ESOPs

-- Companies continue to grant options annually. An increasing number is also offering on-joining grants to employees.

-- While ESOPs still remains the most popular instrument, Restricted Stock Unit (RSU) is the next popular instrument.

-- Procedural and administrative hassles and FEMA restrictions are discouraging close to 69% of the companies from granting ESOPs to their foreign employees.

-- More than half of the companies cover less than 10% of their employees under ESOPs.

-- Senior management employees get around 67% of the Total Options granted by the Company. CEO/CXO level gets around 24% of the pool.

-- Close to two thirds of the companies do not grant options to Non Executive / Independent Directors.

-- Companies are increasingly moving from individual performance criteria for vesting to vesting based on company performance targets (both top line and bottom line).

-- Listed companies are increasingly outsourcing plan management

“The trends over the last 3-4 years clearly show that companies have seen distinct advantages by issuing ESOPs by achieving higher retention and employee motivation”, said Harshu Ghate, Co-Founder & CEO at ESOP Direct. “Companies have also rectified some of the features and coverage criteria based on their experiences” he said.

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About ESOP Direct

ESOP Direct is a leading solutions company in the space of Equity based compensation and offers services covering the entire life cycle of ESOPs including Plan conceptualization, Design, Documentation, Plan management, Compliance and reporting. ESOP Direct is the first and the only company to offer a full spectrum of integrated on-line stock plan management services, including plan administration, compliance, employee communication and online transaction capabilities. This service is delivered using their proprietary web based platform My ESOPsTM. ESOP Direct also offers a web based platform for financial reporting of stock options which includes valuation , expensing and reporting under IFRS, IGAAP & FAS 123R.

ESOP Direct, since its inception in 1999, has advised more than 500 companies on their ESOP design and implementation.