What is Employee Stock Option plan? Explain the importance of such plans in the modern time.

As per Section 2(37) of the Companies Act, 2013 , "employee's stock option" means the option given to the directors, officers or employees of a company or of its holding company or subsidiary company or companies, if any, which gives such directors, officers or employees, the benefit or right to purchase, or to subscribe for, the shares of the company at a future date at a pre-determined price. ESOP or employee stock option plan refers to a basket of instruments and incentive schemes that find favour with the new upward mobile salary class and which are used to motivate, reward, remunerate, and hold on to achievers. Importance of ESOPs: It provides an opportunity for employees to participate and contribute to the growth of the company. It creates long-term wealth in the hands of the employees. It attracts, retains, and motivates the best available talent in the Company. It creates a sense of ownership between the company and its employees.