Pay · HR glossary

ESOP

ESOP can mean different arrangements by jurisdiction. In Indian employment offers it commonly means an employee stock option plan; in the United States it often means an employee stock ownership plan.

Example

An Indian employer offers options that vest over time and allow employees to purchase shares under a specified exercise price and plan conditions.

What to keep in mind

Always expand the acronym before comparing benefits. An option plan and a US ownership retirement arrangement have different structures, rights and tax treatment, so they should not be described as interchangeable.

Further reading

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