Rewards Special: Linking Equity to Performance
Esops have become quite prevalent across all sectors. Interestingly, the conventional sectors like steel, power, manufacturing, etc have also started using them as attraction, retention, reward and performance driving tools. Today, stock options are an integral part of senior management compensation. To have the desired impact, the Scheme needs to be customised keeping in mind the industry, history of the company, future growth path and people profile of the company. You can't just take another company's scheme and copy it or go to a lawyer and get a draft. If you do that, you are probably not taking your people seriously.