Employee Opportunity to Own Company Shares ~ Insurance Academy

ESOP is a program that gives employees the right to share ownership. Company stock ownership programs with ESOPs first appeared in America in the 1950s. In Indonesia, ESOP is also known as Employee Share Ownership Program (PKSK).

In practice, ESOPs are carried out by companies in several ways. One of them is that the company provides its shares for free (stock grant) to employees, sells company shares to employees (usually at a discount) and gives employees the option to buy company shares at a certain period and at a certain price.

Why do companies give employees to own company shares through an ESOP? There is some reasons.

Gifts for employees
If you are familiar with the term stick and carrot, maybe this expression is right. The company will give prizes to those who excel and punishments for employees who make mistakes or are not productive. One form of the prize is the ESOP. It is hoped that this ESOP will motivate employees to continue to excel.

Retain good employees
ESOP ownership is also considered capable of being a means for companies to retain good employees. By having an ESOP, employees certainly have a high sense of belonging to the company. In other words, ESOP can create loyalty for its best employees.

Reduce cost
ESOP can be taken from the salary or bonus that should be received by the employee. Indirectly, the company gets fresh money for the company’s operations. Immediately, the burden of salary costs is reduced. This can be used when the company needs financial support for its expansion.

If you are offered an ESOP, don’t worry. That means the company values and appreciates you. However, study and ask in detail the terms and conditions.

Image source: https://gunungrizki.com/