Kpit Cummins Campus Camp, Pune, Maharashtra

In an attempt to give equity to employees, have you factored in the impact of individual quantum, alternate instruments, grant frequency, liquidity, vesting conditions and other aspects of the equity compensation plan? since equity compensation plans have long term implications and should be evaluated from stakeholders’ perspectives, you would need guidance from experienced professionals in this area. The c3 model conceptualization equity compensation has a lot to do with the corporate philosophy. What are the strategies for achieving corporate objectives and where and how does equity compensation fit in to execute those strategies? we work with the compensation committee and senior management to identify these linkages and conceptualization contours of the plan. consummation on receiving a go-ahead from the compensation committee and senior management the hi-level framework is drilled down to finer aspects of plan design. Company specific expectations, industry bench-marking and best practices are embedded into the plan. This is followed by drafting the plan document along with necessary shareholder and board resolutions. In case the plan is to be implemented through the trust route, we also create a trust to manage the plan. communication the concept of esop goes much beyond being a tool of monetary incentivization. For the employee to get a sense of ownership and belonging to the company, it is imperative they appreciate the value and benefits of their options. We conduct interactive sessions with the employees to educate them on what they possess in the form of esop. This lends transparency as well as builds up mutual trust.

In a dynamic economic and legal ecosystem, it is imperative to revisit your existing plan to yield the best results. We review your plan in light of current trends as well as compliances. Review of esop schemes and grant practices reviewing of plan is essential for you to see which goals have been accomplished, whether changes need to be made and what new direction your company might want to take. This may arise due to the need for making a new grant, limitation to expand the equity pool, high burn rate, evaluation of alternative structures, regulatory changes, mergers and acquisitions, public listing of the company, correction of past inconsistencies and many others. grants practices – benchmark and bring plan in line with strategic goals and objectives we review your existing grant practices and processes in order to benchmark with the relevant industry best practice. We analyze scheme parameters with a special reference to coverage, individual quantum, pricing of options, grant frequency, vesting conditions and schedule and esop pool size, in light of market trends and suggest grant parameters to make future grants more attractive for plan participants. You can also call upon us for guidance on options outstanding with separated employees and existing employees in order to deal with the challenges of minority shareholding – pros and cons, associated costs, tax implications after due diligence and making a recommendation.

All equity linked incentives be it ESOP, RSU, SARs or Phantoms eventually have a contingent claim on the organization’s equity or cash flow or both. However, they have different impact on dilution, accounting, taxation and need to serve unique situations like lack of liquidity, getting traction at different employee levels, legal implications and administrative actions. ESOP Direct will help you do extensive prior research to decide the future strategy. Which instruments should I implement@f0 How it is going serve the company’s goals? How can I optimize the use of the equity pool? How will the taxation work? Can I implement more than one instrument? What is the employees’ outlook towards the instrument@f1 What are the industry best practices@f2. ESOP Direct will answer all these and help you in identifying the right combination of alternative instruments necessary to make short term and long term strategies. Evaluation of Alternative Instruments and Making Recommendation on Feasibility of Implementation : Legal / Tax / Accounting Perspective Effectiveness from Employee Perspective Feasibility to Implement the Plan Through a Trust Key Implications and Associated Risk Industry Best Practices for Informed Decision Making

The tax implications of esop heavily impact the employees of the company. For a multinational company, the taxation laws applicable would vary in different countries. Simply put, multiple taxation parameters must be simultaneously balanced and esop direct helps you do exactly that. Esop direct offers consultancy on the tax implications of stock option schemes under various scenarios, be it under trust management or different geographies or different resident status of the employees. We also give expert recommendations to mitigate tax liability within legal parameters without impacting the efficacy of the scheme. Legal opinion and advisory on tax liability of the resident and non-resident employee in different countries, tax withholding by the companies and amount of deduction which can be claimed in each assessment year in respect of the esop cost. Preparing country wise tax handbook in accordance with applicable laws and amendments and quarterly updates, serving tax administration of plans having global coverage or mobile employees. Taxation of esop trust set up for administration review of historical tax treatment of esops and compliances thereof

Typically, the grant process involves execution of grant letters and grant agreements (in physical form), which becomes cumbersome if employees are located at multiple locations, especially overseas. e-Grants does away with all the paper work, delays, coordination hassles thereby making the whole process efficient and employee friendly without compromising on compliance and control aspects. For companies that use My ESOPs platform for managing their Plans, e-Grants is integrated with My ESOPs ensuring seamless flow of information on grants. If you do not opt for our Plan management service, you could use e-Grants as a stand-alone tool. We would be happy to offer it as a hosted solution on a SaaS model. You can download the reports as and when the grant process is complete.

We facilitate your employee stock option program by offering funding and cashless exercise to employees who need them. You may want this service specially if there are many employees who have liquidity constraints or are non-resident and don’t have direct access to capital marke in order to make your esop fluid and efficient, esop direct helps plan holders with funding to pay for exercise and perquisite tax through my esops platform. We have integrated this unique online functionality to help them identify multiple funding opportunities extended by different fund houses and also get guidance in executing the transaction. Zero c – cashless exercise very often employees are constrained from exercising the options because they do not have funds to pay for the exercise price and perquisite tax, loans may not always be convenient. In yet another pioneering effort, we have designed zero c, india’s first cashless methodology, duly vetted by legal experts and approved by the regulators. Embedded in my esops, zero c allows employees to exercise their options without bothering to arrange for funds.

Valuations simplified , as a company you would always want to ensure that cost associated with your plan is properly estimated and accounted for , the accounting value is derived through the use of option pricing model which is based on inputs used under various assumptions. Esop direct help you in the valuation of your option, its accounting along with required compliance and disclosures as per indian gaap, ind as, ifrs, us gaap, fas 123, sfrs and others standards established by applicable agencies. Esop valuation option valuation as a company you would always want to ensure that the cost associated with your plan is properly estimated and accounted for. The accounting value is derived through the use of option pricing model which is based on inputs used under various assumptions. Correct valuation depends greatly on combining industry knowledge with expertise. Esop direct will help you with considering appropriate variables following the guidance and standards applicable to the company. accounting treatment evaluating employee compensation cost under intrinsic and fair value amortization as per igaap or other standards track subsidiary/ sbu information for tracking transfer cases and allocation of cost to relevant subsidiaries/sbus transition to ifrs calculating impact due to change in gaap analysis of alternative valuation models impact of plan conditions on future accounting cost reporting and disclosures automated disclosures as per igaap employee level costs to enable cross charge and reporting at division level.