ESOP Plan Design & Structuring
Designing an Employee Stock Ownership Plan (ESOP) isn’t just about allocating shares—it’s about creating a structured, future-ready incentive model that aligns your company’s growth with employee ownership.
- More Than 20 years of experience
- Team Comprises of Ex Bankers, CAs, CSs and Lawyers
- Fully Integrated Services
- Transparency in engagement
- Solution based approach
Unlock Ownership. Inspire Performance. Fuel Growth
Designing an Employee Stock Ownership Plan (ESOP) isn’t just about allocating shares—it’s about creating a structured, future-ready incentive model that aligns your company’s growth with employee ownership. Our expertise lies in the strategic planning and structuring of ESOPs that support your business goals while maintaining financial and operational balance.
ESOP structuring involves the careful planning of how equity will be granted, distributed, and managed within your organization. It requires alignment between financial modelling, company stage, legal considerations, and long-term business strategy.
We help you answer critical questions such as:
- How large should the ESOP pool be?
- Who should be eligible, and on what basis?
- What vesting terms and performance criteria make sense?
- How does the ESOP impact future fundraising or exits?
- How do we manage dilution and maintain cap table integrity?
Our ESOP Planning Framework shall comprise of:
Equity Pool Sizing
We analyze your hiring roadmap, funding plans, and ownership goals to determine the right size of the ESOP pool—balancing competitiveness with investor expectations.
Participant Allocation Strategy
Not all roles carry equal strategic weight. We help define allocation tiers based on role criticality, tenure, and impact, ensuring high performers are adequately rewarded.
Vesting & Cliff Design
We craft vesting schedules that promote retention and performance—typically incorporating industry-standard 1-year cliffs and 3–4 year graded vesting, or tailoring them based on your business needs.
Instrument Selection
We advise on the most appropriate equity instruments based on your legal jurisdiction and growth stage—whether stock options, RSUs, SARs (Stock Appreciation Rights), or phantom stock.
Scenario Planning & Dilution Modeling
Using dynamic cap table modeling, we simulate various future scenarios (e.g., fundraises, exits) to visualize dilution impacts and optimize ownership outcomes for founders, employees, and investors.
Alignment with Funding and Exit Strategy
We ensure your ESOP structure is flexible enough to evolve through funding rounds and aligned with your long-term exit strategy, be it acquisition, secondary sale, or IPO.
Why is Structuring so important?
A well-structured ESOP:
- Enhances retention without over-diluting founders or early investors
- Supports fundraising by signalling strategic HR planning
- Creates alignment between key talent and shareholder value
- Avoids costly restructuring in later stages