One of the most popular employee reward and retention strategies used by global employers since decades has been Employee Stock Option Plans (“ESOPs”). ESOPs were invented in the USA in 1956 by a capitalist corporate lawyer Louis Kelso. They gained popularity in India since the late 1990s along with the advent of the technology sector in the country. An ESOP is essentially a tool to attract, incentivize and retain talent in the company by offering to the employees an opportunity (known as an option) to purchase shares of the company at a future point in time or based on certain conditions, generally linked to time and/or performance. Ordinarily, the shares are offered at a pre-determined price which, as per the company’s expectations, would be lower than the market price at the time when the employee will be eligible to exercise the option. The popular reasons for implementing ESOPs are wealth creation for employees, retention, attracting new talent and inculcating the feeling of employee ownership to motivate employees.