ESOP stands for Employee Stock Option Plan. It is the option given to the whole-time directors, officers or employees of a company, which gives them the right to subscribe to the shares of the company at a future date at a particular price. It seeks to make employees participate in the value they contribute to create.
These shares generally have a Lock in Period. The benefit for the company issuing ESOPs is that they manage attrition as generally these lock in periods are long and the employees do not leave the company without encashing the shares given to them under ESOPs.
