What is Employee Stock Option Plan?

All entrepreneurs have at least one common problem: how to motivate employees in a way that’s mutually beneficial. The most practical solution to this is the employee stock options plan (ESOP), used by small and large businesses alike. It not only keeps deserving employees motivated to grow your company, rather than just fulfill their duties, it ensures that you don’t lose them for a number of years.

In an ESOP, companies provide their employees with stock ownership, often at no up-front cost, but in lieu of work performed. Shares are allocated to employees, but may vest only after a pre-defined period.