• Home
  • About
  • Contact
  • Privacy
  • Terms
  • DCMA
  • Write For Us / Submit
Tech News, Magazine & Review WordPress Theme 2017
  • Tech
    How Drones and 360-Degree Cameras Are Changing Bridal Photoshoots

    How Drones and 360-Degree Cameras Are Changing Bridal Photoshoots

    120+ Best Creative Names for Team at Work

    120+ Best Creative Names for Team at Work

    Can You Repair Printed Circuit Board ?

    Mastering PCB Board Repair Comprehensive Guide

    Breaking Barriers Federal Inmate Texting Service

    Breaking Barriers Federal Inmate Texting Service

    transfer whatsapp from android to iphone

    How to Transfer WhatsApp from Android to iPhone!

    Understanding the Role of Humidity Chambers in Climate Testing

    Understanding the Role of Humidity Chambers in Climate Testing

    Everything You Get to Know About Movember Beard Memes

    Everything You Get to Know About Movember Beard Memes

    Best Book Recommendation Apps

    11 Best Book Recommendation Apps

    How to quickly divide or Split PDF files

    How to Quickly Divide or Split PDF Files

  • Gear
    • All
    • Camera
    • Laptop
    • Smartphone
    The New Galaxy Watch Ultra and Galaxy Ring Are Announced by Samsung

    The New Galaxy Watch Ultra and Galaxy Ring Are Announced by Samsung

    Exploring the Innovative Features of Pear Phones

    Exploring the Innovative Features of Pear Phones

    Latest Smart Home Gadgets for a Connected Life

    Latest Smart Home Gadgets for a Connected Life

    Eco-Friendly Products for Students

    Eco-Friendly Products for Students

    Essential Photography Equipment and Gadgets

    Mastering Your Shots: Essential Photography Equipment and Gadgets

    Level Up Your Game: Must-Have Gaming Gear!

    Level Up Your Game: Must-Have Gaming Gear!

    Trending Tags

    • Best iPhone 7 deals
    • Apple Watch 2
    • Nintendo Switch
    • CES 2017
    • Playstation 4 Pro
    • iOS 10
    • iPhone 7
    • Sillicon Valley
  • Gaming
    Master the World of Online Gaming with the Best Gaming VPN

    Master the World of Online Gaming with 3 Best Gaming VPN

    7 Powerful Strategies to Overcome Video Game Addiction and Reclaim Your Life

    7 Powerful Strategies to Overcome Video Game Addiction and Reclaim Your Life

    Powerful Ways Xbox Cloud Gaming is Revolutionizing the Gaming World

    5 Powerful Ways Xbox Cloud Gaming is Revolutionizing the Gaming World

    9 Best Alternative Games Like Kahoot

    9 Best Alternative Games Like Kahoot

    The Top 8 Free Bubble Shooter Games for Endless Entertainment

    The Top 8 Free Bubble Shooter Games for Endless Entertainment

    Cloud Gaming Revolution: How Streaming is Changing the Future of Gaming

    Cloud Gaming Revolution: How Streaming is Changing the Future of Gaming

  • Crypto
    How Drones and 360-Degree Cameras Are Changing Bridal Photoshoots

    How Drones and 360-Degree Cameras Are Changing Bridal Photoshoots

    120+ Best Creative Names for Team at Work

    120+ Best Creative Names for Team at Work

    Can You Repair Printed Circuit Board ?

    Mastering PCB Board Repair Comprehensive Guide

    Breaking Barriers Federal Inmate Texting Service

    Breaking Barriers Federal Inmate Texting Service

    transfer whatsapp from android to iphone

    How to Transfer WhatsApp from Android to iPhone!

    Understanding the Role of Humidity Chambers in Climate Testing

    Understanding the Role of Humidity Chambers in Climate Testing

    Everything You Get to Know About Movember Beard Memes

    Everything You Get to Know About Movember Beard Memes

    Best Book Recommendation Apps

    11 Best Book Recommendation Apps

    How to quickly divide or Split PDF files

    How to Quickly Divide or Split PDF Files

  • Business
    How Drones and 360-Degree Cameras Are Changing Bridal Photoshoots

    How Drones and 360-Degree Cameras Are Changing Bridal Photoshoots

    120+ Best Creative Names for Team at Work

    120+ Best Creative Names for Team at Work

    Can You Repair Printed Circuit Board ?

    Mastering PCB Board Repair Comprehensive Guide

    Breaking Barriers Federal Inmate Texting Service

    Breaking Barriers Federal Inmate Texting Service

    transfer whatsapp from android to iphone

    How to Transfer WhatsApp from Android to iPhone!

    Understanding the Role of Humidity Chambers in Climate Testing

    Understanding the Role of Humidity Chambers in Climate Testing

    Everything You Get to Know About Movember Beard Memes

    Everything You Get to Know About Movember Beard Memes

    Best Book Recommendation Apps

    11 Best Book Recommendation Apps

    How to quickly divide or Split PDF files

    How to Quickly Divide or Split PDF Files

No Result
View All Result
Geeky Insider
  • Tech
    How Drones and 360-Degree Cameras Are Changing Bridal Photoshoots

    How Drones and 360-Degree Cameras Are Changing Bridal Photoshoots

    120+ Best Creative Names for Team at Work

    120+ Best Creative Names for Team at Work

    Can You Repair Printed Circuit Board ?

    Mastering PCB Board Repair Comprehensive Guide

    Breaking Barriers Federal Inmate Texting Service

    Breaking Barriers Federal Inmate Texting Service

    transfer whatsapp from android to iphone

    How to Transfer WhatsApp from Android to iPhone!

    Understanding the Role of Humidity Chambers in Climate Testing

    Understanding the Role of Humidity Chambers in Climate Testing

    Everything You Get to Know About Movember Beard Memes

    Everything You Get to Know About Movember Beard Memes

    Best Book Recommendation Apps

    11 Best Book Recommendation Apps

    How to quickly divide or Split PDF files

    How to Quickly Divide or Split PDF Files

  • Gear
    • All
    • Camera
    • Laptop
    • Smartphone
    The New Galaxy Watch Ultra and Galaxy Ring Are Announced by Samsung

    The New Galaxy Watch Ultra and Galaxy Ring Are Announced by Samsung

    Exploring the Innovative Features of Pear Phones

    Exploring the Innovative Features of Pear Phones

    Latest Smart Home Gadgets for a Connected Life

    Latest Smart Home Gadgets for a Connected Life

    Eco-Friendly Products for Students

    Eco-Friendly Products for Students

    Essential Photography Equipment and Gadgets

    Mastering Your Shots: Essential Photography Equipment and Gadgets

    Level Up Your Game: Must-Have Gaming Gear!

    Level Up Your Game: Must-Have Gaming Gear!

    Trending Tags

    • Best iPhone 7 deals
    • Apple Watch 2
    • Nintendo Switch
    • CES 2017
    • Playstation 4 Pro
    • iOS 10
    • iPhone 7
    • Sillicon Valley
  • Gaming
    Master the World of Online Gaming with the Best Gaming VPN

    Master the World of Online Gaming with 3 Best Gaming VPN

    7 Powerful Strategies to Overcome Video Game Addiction and Reclaim Your Life

    7 Powerful Strategies to Overcome Video Game Addiction and Reclaim Your Life

    Powerful Ways Xbox Cloud Gaming is Revolutionizing the Gaming World

    5 Powerful Ways Xbox Cloud Gaming is Revolutionizing the Gaming World

    9 Best Alternative Games Like Kahoot

    9 Best Alternative Games Like Kahoot

    The Top 8 Free Bubble Shooter Games for Endless Entertainment

    The Top 8 Free Bubble Shooter Games for Endless Entertainment

    Cloud Gaming Revolution: How Streaming is Changing the Future of Gaming

    Cloud Gaming Revolution: How Streaming is Changing the Future of Gaming

  • Crypto
    How Drones and 360-Degree Cameras Are Changing Bridal Photoshoots

    How Drones and 360-Degree Cameras Are Changing Bridal Photoshoots

    120+ Best Creative Names for Team at Work

    120+ Best Creative Names for Team at Work

    Can You Repair Printed Circuit Board ?

    Mastering PCB Board Repair Comprehensive Guide

    Breaking Barriers Federal Inmate Texting Service

    Breaking Barriers Federal Inmate Texting Service

    transfer whatsapp from android to iphone

    How to Transfer WhatsApp from Android to iPhone!

    Understanding the Role of Humidity Chambers in Climate Testing

    Understanding the Role of Humidity Chambers in Climate Testing

    Everything You Get to Know About Movember Beard Memes

    Everything You Get to Know About Movember Beard Memes

    Best Book Recommendation Apps

    11 Best Book Recommendation Apps

    How to quickly divide or Split PDF files

    How to Quickly Divide or Split PDF Files

  • Business
    How Drones and 360-Degree Cameras Are Changing Bridal Photoshoots

    How Drones and 360-Degree Cameras Are Changing Bridal Photoshoots

    120+ Best Creative Names for Team at Work

    120+ Best Creative Names for Team at Work

    Can You Repair Printed Circuit Board ?

    Mastering PCB Board Repair Comprehensive Guide

    Breaking Barriers Federal Inmate Texting Service

    Breaking Barriers Federal Inmate Texting Service

    transfer whatsapp from android to iphone

    How to Transfer WhatsApp from Android to iPhone!

    Understanding the Role of Humidity Chambers in Climate Testing

    Understanding the Role of Humidity Chambers in Climate Testing

    Everything You Get to Know About Movember Beard Memes

    Everything You Get to Know About Movember Beard Memes

    Best Book Recommendation Apps

    11 Best Book Recommendation Apps

    How to quickly divide or Split PDF files

    How to Quickly Divide or Split PDF Files

Submit
Geeky Insider
No Result
View All Result

Employee Stock Option Plan (ESOP) company benefit in Malaysia

by Staff Writer
August 8, 2022
in Business
Reading Time: 5 mins read
Employee Stock Option Plan (ESOP) company benefit in Malaysia
Share on FacebookShare on Twitter

Other than offering employees an attractive compensation package to retain talent, most companies also offer incentives and benefits, which serve to keep up productivity too.

Normally, these incentives can include bonuses, while benefits include medical claims, subsidised parking, and more.

Table of Contents

Toggle
    • READ ALSO
    • The Power of Diversity and Inclusion
    • Digital Transformation in Business – 6 Key Technologies
  • What is ESOP?
  • Benefits of ESOP on employees and the company
  • The hassle of ESOP 
  • How big does your company have to be to offer ESOP?
  • How can companies implement it in Malaysia?

READ ALSO

Employee Payroll Management Software Simplifying Processes

Employee Payroll Management Software: Simplifying Processes

August 23, 2023
Remote Working and the Future of Work

Remote Working and the Future of Work

August 3, 2023

In Malaysia, however, one lesser-known benefit is the Employee Stock Option Plan (ESOP).

What is ESOP?

ESOPs are stock options that are granted to employees in a company. The stock options offered are a form of equity compensation that gives an investor the right, but not the obligation, to buy (exercise) or sell a stock at an agreed-upon price and date.

The price and quantity of the shares are usually predetermined by the company. 

Different from your standard exchange-traded options (shares), ESOPs aren’t generally traded on the exchange.

For certain companies, employees would need to wait for a specified time before they can carry out the option.

Image Credit: Unsplash

Funding Societies, a Southeast Asian digital financing platform for SMEs with operations in Malaysia, is one example of a company giving out ESOP to its employees.

According to its spokesperson, Chai Kien Poon (KP), Funding Societies’ ESOP is open to all eligible staff in the markets the company operates in.

They include employees in Malaysia, Singapore, Indonesia, Thailand, Vietnam, India, and even remote teams.

Funding Societies employees’ eligibility to opt-in for ESOP is based on their job levels as well as the type of grant given to the employees.

The grant ranges from 25% to 100% of the annual salary of the eligible employees, which include:

  • New hires: Particularly those in critical or hard-to-acquire and hard-to-replace roles;
  • Long service employees: Long-serving employees who serve for a minimum of a two-year period;
  • Promotions: Employees who demonstrate the ability to assume higher responsibilities and be promoted to a new job level;
  • Performance: Employees who deliver consistently high-level performance over a specific period of time;
  • Spot bonus: Employees who consistently outperform in performance or project, with tangible financial results, or those who consistently live and demonstrate company core values.

Benefits of ESOP on employees and the company

ESOP works as a tool in attracting and retaining talents. For Funding Societies, KP shared that it helps the company strengthen itself against competitors. 

“As ESOP provides employees with a sense of ownership in the company, this enhances their job satisfaction and morale, and subsequently helps us with employee retention,” said KP. 

He reported that since implementing ESOP, the company has seen its lowest employee attrition rate and highest employee happiness scores since Funding Societies was founded in 2015.

ESOP can also serve as an incentive to encourage employees to contribute above and beyond their immediate roles and responsibilities. 

Image Credit: Pexels

To facilitate this, Funding Societies’ ESOP grants are also tied to consistent outperformance during each half-yearly review.

“Because ESOP gives employees a share of the company, individual employees will directly benefit from the success of the company contributed by their efforts, and subsequently they will feel a sense of ownership,” KP elaborated. 

Compared to an external third-party sale of company shares, ESOPs can take less time to implement. However, it’s worth noting that there are downsides to ESOPs as well.

The hassle of ESOP 

In general, the greatest benefits of a stock option are realised if a company’s stock rises above the exercise price (the price per share its owner can buy or sell).

Typically, Employee Stock Options (ESOs) are issued by the company and cannot be sold, unlike standard listed or exchange-traded options. 

One hassle of offering ESOP is brought up when an employee leaves the company. Resigning employees can choose to sell their shares back to the company and receive their payouts in the form of dividends.

Doing so would require companies to have strong management to succeed during an ESOP transition. More often than not, the services of lawyers and accountants are also required during this transition process.

Of course, there are more pros and cons of implementing ESOP, and if you’re an employer considering it, it’s worth doing more of your own research or speaking to experts for sound advice.

How big does your company have to be to offer ESOP?

Funding Societies’ KP shared that ESOP options are best incorporated into the benefits structure when a company projects strong growth in the coming years.

For context, the company has 500 employees across the group, with over 120 of its current and former staff having benefited in the form of cash rewards from the share buyback rounds.

“Contributions from the staff are crucial [for ESOP to succeed]. It provides a sense of belonging and ownership knowing that they can enjoy additional benefits from the growth on top of other bonuses and awards,” KP added.

One article by Commerce Bank from the US suggests that ESOPs are not ideal for startups or very small businesses. 

“The cash flow dedicated to the ESOP can limit what’s available to reinvest in daily operations, posing a challenge for earlier-stage companies,” it wrote.

“And [as] shares must be repurchased when an employee departs, a small business could face a steep future expense if several team members leave at once.”

In the unfortunate event that the company goes downhill, ESOP can mean nothing to its owners.

How can companies implement it in Malaysia?

If you’re considering creating a compensation/reward plan that includes ESOP, it’s essential to know how they work in Malaysia.

Locally, ESOPs are considered “securities” under the Capital Markets and Services Act 2007 (“CMSA”) Securities Law.

Malaysian labour laws, company laws, securities laws, listing requirements, EPF implications, and tax laws are some of the things that need to be carefully considered when customising an ESOP.

More importantly, Funding Societies shared that companies offering ESOP should ensure that its employees’ values align with the company’s.

“Have a philosophy crafted around your stock option plan factoring in your mission and values in the ESOP design,” KP explained. 

This ensures that the stock option jives with an employee’s intrinsic values which would add a layer of attachment to the company.

KP elaborated that when the employee’s and company’s values are aligned, both will mutually move towards the same goals and vision.

  • Read other workplace-related articles we’ve written here.

Featured Image Credit: Vulcan Post



Source by vulcanpost.com

Related Posts

10 Essential entrepreneurs' characteristics For Success
Business

10 Essential Entrepreneurs’ Characteristics For Success

September 28, 2023
Entrepreneurship ethics - From Startup to Success
Business

Entrepreneurship ethics – From Startup to Success

August 24, 2023
Employee Payroll Management Software Simplifying Processes
Business

Employee Payroll Management Software: Simplifying Processes

August 23, 2023
Remote Working and the Future of Work
Business

Remote Working and the Future of Work

August 3, 2023

Recommended.

LVMH buys California wine giant Joseph Phelps as high-end drinks market soars

LVMH buys California wine giant Joseph Phelps as high-end drinks market soars

June 29, 2022
Samsung plans to sell over 270 million devices in 2023, push foldable devices like the Z Fold and Z Flip hard

Samsung plans to sell over 270 million devices in 2023, push foldable devices like the Z Fold and Z Flip hard- Technology News, Firstpost

November 2, 2022

Trending.

No Content Available
  • Home
  • About
  • Contact
  • Privacy
  • Terms
  • DCMA
  • Write For Us / Submit
Contact us for submission queries. editor[at]geekyinsider.com.
No Result
View All Result
  • Home
  • Review
  • Apple
  • Gaming
  • Gadget and Gear
    • Camera
    • Smartphone
  • Microsoft
  • Security