Employees share based compensation (ESBC) has been described as
one of the most novel innovations in the corporate business world
and finance. First, because it creates a win-win situation between
the employer and employees by aligning the interest of both parties
towards increasing the net worth of the company. Secondly, it
creates a cash free source of remuneration for employers. Thus,
employers (especially start-ups and early growth companies) are
able to channel scarce cash to other areas of business requiring
urgent attention while still benefitting from the impact of a
motivated work force.
ESBC is a form of employee remuneration that generally involves
the grant of shares or stock options to the employees at a
concessional price or a future cash payment based on the increase
in the price of the shares from a specified level in return for
their service as employees of the company. Such payments are known
with a variety of names including employees stock option
