New Delhi, Dec. 5 -- Employee Stock Option Plans (Esops) are a potent tool to ensure that the key employees stay and grow with the company. With startups, the Esop value is notional, meaning it is unlocked only when the company goes public or a buyer is willing to purchase the unlisted shares. If the shares are listed stocks, the wealth potential is real.

Esops are a great wealth creator, especially when one is getting regular allotments, which helps build good positions over time. While the positives exist, there are certain things to keep in mind regarding Esops.

Esops can be a concentration risk

Many have substantial holdings in Esops, which become the most important asset holdings by far. High concentration of one company's shares ...