Prajna Capital - An Investment Guide

Market Regulator SEBI Allows Repricing Of ESOP, this is due to market conditions as Exercise Price Becomes Less Than Market Price making ESOP less attractive. THE bloodbath in the stock market has forced some firms to restructure their employee stock option programmes ( ESOP ) to assuage employees who are seeing a large portion of their ‘ wealth’ disappear. Thanks to the market correction early this year, a number of Esop schemes have become redundant or gone “ underwater ”. This means the current market price of the stock has fallen below the Esop exercise price. This is true of most firms that issued Esops over the past one-and-half years when the markets were high and bullish. There are many firms which started Esops last year, particularly those which got listed in 2007. All firms who have a vesting period of one year would either have to reprice the options or see it as a worthless option at the hand of the employee which won’t be exercised. Employees who got Esops before the mar...