… you would like to offer your key persons the possibility to become shareholders of your company and to align the incentive structure with your company’s long term success
In an employee option participation plan or “ESOP” (employee share option plan), a company sets forth the rules under which it grants options to buy shares to its employees and board members.
The goal of the plan is broadly to incentivize key persons to stay with the company and perform by allowing them to participate in its financial success.
The rules set forth in the plan substantially determine the value of the options. Because the options are generally treated as part of the salary for tax and social insurance purposes, employers are well-advised to use valuation methods that are recognized by the competent authorities and carefully draft those provisions of the plan that affect the value of the granted options.
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