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Do you know what an employee stock ownership plan (ESOP) is? Simply put, it gives workers stock in a company if certain conditions are met.
ESOPs give employees a much bigger stake in building the company. These plans can also attract top talent and help founders manage cash flow. It’s pretty common for founders – especially those running early-stage startups – to offer an ESOP in place of bonuses, increments, or as part of a salary package.
There was a time when ESOPs weren’t very popular in Southeast Asia. But that seems to be changing, as we find out in today’s premium story.
Today, we look at:
- The growing popularity of ESOPs in our ecosystem
- A mortgage technology startup that’s raised fresh funds
- Other newsy highlights such as Razer Gold’s in-principle approval to operate as a major payment institution and OCBC Bank and Ant International’s plans to enhance cross-border fund settlements
Premium summary
It’s fun to have an E-S-O-P
Image credit: Timmy Loen
ESOPs are on the rise in Southeast Asia and India, results of a recent survey show.
- Some numbers: In 2021, six out of 10 startups offered ESOPs. Today, this number has grown to eight out of 10, according to a study by Saison Capital, XA Network, and Carta.
- We build together: ESOPs are being implemented earlier in the startup life cycle and are also increasingly being made available to employees beyond senior management. This suggests that founders are recognizing the value of ESOPs as a tool for attracting and retaining top talent even in the early stages.
- More to be done: Despite these changes, founders still need to understand ESOPs better, as these plans need to be structured strategically and implemented seamlessly to make a real difference.
Read more: ESOPs pick up steam in SEA as tech winter bites
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