Employee Stock Option Plan (ESOP) is an employee compensation strategy wherein eligible employees are awarded equity shares at a pre-determined rate, generally lesser than the market value of such shares. ESOP is not an alien term anymore. In fact, it has gained significant recognition and acceptance worldwide. In India, too, ESOP has evolved as an effective tool that corporates are adopting to reward, retain and motivate their star performers. Initiated by the IT industry, ESOPs have now made their way into diverse industries.

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