Setting up an ESOP

Once a company has decided to set-up an ESOP or employee share scheme for staff, key decisions need to be made on:

  • the percentage of company equity to allocate to the ESOP pool
  • the allocation of grants from this pool to participating staff.

Template for ESOP Allocations

Some companies offer ESOP to all of their employees, while others reserve allocations for top staff and senior positions only. Companies should decide how widely to offer ESOP grants, and also how many options to offer employees, based on their objectives for the scheme. As a general guide, employees at the same level should be offered the same amount of options.

Companies can use this ESOP allocation tool as a guide for calculating ESOP pools and potential allocations to staff:

Get the free ESOP allocation template

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Related articles:

ESOP assessment- which ESOP is right for you?

ESOPs: a comprehensive guide to Employee Share Ownership Plans updated for 2021

Using call options for your ESOP

DISCLAIMER: This article and template are for informational purposes only, and contain general information only. Orchestra is not, by means of this information, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services nor should it be used as a basis for any decision or action that may affect your business or interests. Before making any decision or taking any action that may affect your business or interests, you should consult a qualified professional advisor. This information is not intended as a recommendation, offer or solicitation for the purchase or sale of any options or shares.