Definition
Employee Stock Option Plan – A scheme granting employees (or, in some cases, a single named executive) the right to buy company shares at a fixed exercise price after vesting, expensed over the vesting period at the option's fair value on the grant date. A large, concentrated ESOP grant to one executive shortly before an IPO is a governance signal worth reading closely, distinct from a broad-based employee scheme meant to align an entire workforce with shareholders. Found In: Income Statement (share-based payment expense), Notes to Financial Statements