New Delhi, April 16 -- Employee stock ownership plans or employee stock option plans (ESOPs) are incentives beyond salaries, and the allotment of shares gives employees a sense of ownership in the company. The incentive aims to promote employee retention and encourage performance. Employees can benefit from selling shares or earning dividends based on company performance. Here's all you need to know about ESOPs.

Employee stock ownership plans, or ESOPs, offer shares of a company to its employees at low or no additional cost. These shares can be encashed after a specific period at a particular price.

The board of directors or a designated pay committee typically decides the number of ESOPs, eligible employees, and the price at which they...