European Business Law Review

Volume 27 (2016)

Volume 27 (2016) / Issue 4

Pravesh Aggarwal, 'Benefits to Employees by Way of Stock Options or Stock Purchase Schemes in India: Evaluating its Scope, Need and the Problems under the Extant Legal Regime' (2016) 27 European Business Law Review, Issue 4, pp. 501–512

Abstract

This paper attempts to analyse the scope and need of Employees’ Stock Option Schemes (ESOS) and Employees’ Stock Purchase Schemes (ESPS) along with the problems associated with their exercise in light of the extant legislative framework in India. Initially, the paper will delineate upon the meaning and scope of the term “employee” in order to determine who should actually entitled to benefits of the stock option or purchases schemes without any possible misuse of company’s resources. In process, it is seen whether the following categories of persons, named promoters, nominee directors, and ex-employees of the company or its erstwhile holding company, are covered within the meaning of the term “employee” or not. A further analysis on whether the “employee” is an insider within the meaning of the SEBI (Prohibition of Insider Trading) Regulations, 2015 is dealt later in the paper. Thereafter, the paper will highlight the problems faced by the employees in exercising of their stock options. Finally, the paper will conclude by critically evaluating the need for granting the stock option or purchases schemes in light of the problems associated therewith for both companies as well as their employees.

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ISSN: 0959-6941
ID: EULR2016022