Question
What is the full form of ESOP?
Solution
ESOPs stand for Employee Stock Option Plan or Employee Stock Ownership Plan. It is an employee benefit plan that gives workers ownership interest in the company. An organization grants ESOPs to its employees for buying a specified number of shares of the company at a defined price (exercise price) after the exercise period (a certain number of years). Before an employee could exercise his option, he needs to go through the pre-defined vesting period which implies that the employee has to work for the organization until a part or the entire stock options could be exercised
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