what is an employee stock option scheme (ESOS) mean?

Employee Stock Option Scheme (ESOS) is a type of employee benefit plan that enables employees of a company to own a stake in the company by providing them with the option to purchase company stock at a predetermined price.

Under an ESOS, the company grants options to its employees to purchase shares of the company at a future date, usually after a specified period of time has elapsed. The price at which the shares can be purchased is typically lower than the current market price of the company's stock, making it an attractive incentive for employees to participate in the scheme.

ESOS is typically used as a tool to attract and retain talented employees, align their interests with the company's growth, and incentivize them to contribute to the company's success. When the employee exercises their options and purchases the shares, they become a shareholder of the company and are entitled to receive dividends and participate in the company's growth.

It is important to note that ESOS is subject to certain regulations and guidelines issued by the Securities and Exchange Board of India (SEBI), which includes restrictions on the size of the ESOS pool, vesting periods, and the maximum number of options that can be granted to individual employees.