Changes to Esop norms likely

"WITH THIS, AS long as there is a one-year hiatus between the grant date and the date of the board meeting approving the issue, you're fine. People can plan accordingly now," he said.

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The paper noted that in many new-age tech companies, with each successful round of investments, the founders' shareholding gets diluted. "In order to keep them incentivized over the long run despite such dilution and avoid cash flow strains (attributable to enhanced managerial remuneration), the investors and the management offer Esops to founders to boost their holdings and drive them to scale their ventures for a longer term," it said, adding that in some cases, Esops are also performance-linked incentives offered to founders to keep them invested in the company.