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Information, communication and entertainment sector companies continues to be major users of employee stock option schemes.
However, a recent study by KPMG showed that participation from financial services firms and private equity sectors has seen an increase over a period of time.
In the latest KPMG survey report titled ‘Employee Stock Options/Equity Incentives - Industry Insights’, conducted among 460 listed and unlisted companies, including multinationals, 30 per cent of the companies, which adopted ESOP, were from ICE sector.
It was popular among financial sector companies; some 26 per cent of the respondent companies were from this sector. It is also becoming popular among manufacturing and consumer goods sectors.
“ESOPs are yet to gain momentum into other sectors”, KPMG said.
Parizad Sirwalla, Partner and Head – Global Mobility Services, Tax, KPMG in India, said, “The recent changes in the company law provisions, which provide clarity and aligns with the Securities and Exchange Board of India (SEBI) guidelines, will continue to make ESOPs as an important compensation tool for attracting and retaining employees by companies.”
KPMG also noticed that very few unlisted companies are contemplating an initial public offering (IPO), which indicates that companies are envisaging alternative exit mechanisms. Nearly 60 per cent of the respondents indicated that their plan applied uniformly to all employees irrespective of the level of employees.
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