ESOP plan - Valuation of the Company?

Do we have to check the valuation of the Company before coming out with an ESOP plan?

Hey @Shweta_Saini

Yes, the valuation of the company will be done before coming out with an ESOP. However, it depends on the type of company:

1. In the case of listed companies: At the time of grant of an option valuation of fair Market value of shares shall be done by a registered valuer. And at the time of exercise of an option, the valuation shall be done by Merchant banker.

2. In the case of Unlisted companies: At the time of grant and exercise of an option valuation of Fair value of shares shall be done by a registered valuer as per “Guidance note on accounting for employee share-based payment”.