Press release from Business Wire India
Source: ESOP Direct
Monday, July 01, 2013 09:30 AM IST (04:00 AM GMT)
Editors: General: Consumer interest, People; Business: Accounting & management consultancy services, Advertising, PR & marketing, Banking & financial services, Business services, Financial Analyst, Information technology, Major diversified industrial groups, Media & entertainment; Technology
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ESOP Direct Launches Zero C for Cashless Exercise of ESOPs
Pune, Maharashtra, India, Monday, July 01, 2013 -- (Business Wire India) -- Very often employees are constrained from exercising the options because they do not have enough funds to pay for the exercise price and perquisite tax. Loans are either not available immediately at that moment or the employee is not comfortable to borrow. Even if one were to borrow and fund the exercise, he / she is still exposed to the market risk (between the date of exercise and date on which shares hit the demat account) for more than a month. In a volatile market this period could wipe out the entire ESOP gains for the employee who has already paid the perquisite tax on the notional gain.
As another pioneering initiative, ESOP Direct has designed India's first Cashless methodology, Zero C, which has been vetted by legal experts and approved by regulators.
Harshu Ghate, Co-Founder & CEO of ESOP Direct says, "Time lag between the employee exercising and he getting the tradable shares is usually around 30-45 days. This is one loose end in the value realization process for the employee. Zero C is an online functionality on our platform which shortens this time lag to 5-7 days. Companies often ignore this pain point for the employee, which exposes him to market and financial risk. This unique solution will go a long way in making ESOPs a delightful experience for the employee and eventually the employer."
A core component of My ESOPs (ESOP Direct's platform for management of ESOPs), Zero C, allows employees to exercise their options without bothering to arrange for the funds. The tool manages the entire back-end process, settles the employee's liability and transfers the net gain to the employee's bank / demat account.
This process is extremely convenient for Foreign Nationals and Non Resident Indians who can exercise and get the money directly remitted to their bank account without opening a PAN / Bank / Demat account which is a very cumbersome and time consuming process for them.
Nalin Singla, Global Head - Global Head Rewards & HR Operations, Ranbaxy Laboratories Ltd says "We have been using the Zero C tool from ESOP Direct for the last 3 quarters and it has significantly streamlined our exercise process. Our employees can now realize their ESOP gains fast and without much difficulty. The tool provides user friendly navigation. Over the last three quarters over 70% of exercises have been through the Cashless route, an indication that the employees prefer this mode"
About ESOP Direct
ESOP Direct is a leading solutions company in the space of Equity based compensation and offers services covering the entire life cycle of ESOPs including Plan conceptualization, Design, Documentation, Plan management, Compliance and reporting. ESOP Direct is the first and the only company to offer a full spectrum of integrated on-line stock plan management services, including plan administration, compliance, employee communication and online transaction capabilities. This service is delivered using their proprietary web based platform My ESOPsTM. ESOP Direct also offers a web based platform for financial reporting of stock options which includes valuation , expensing and reporting under IFRS, IGAAP & FAS 123R.
ESOP Direct, since its inception in 1999, has advised more than 500 companies on their ESOP design and implementation. It manages more than 250 Plans on its platform covering over 100,000 global employees.
Web: http://www.esopdirect.com
CONTACT DETAILS
Harshu Ghate, Co-Founder & CEO, ESOP Direct, +91 (020) 66525284, consulting@esopdirect.com, info@esopdirect.com
KEYWORDS
CONSUMER, PEOPLE, CONSULTANCY SERVICES, MARKETING, BANKING, BUSINESS SERVICES, Financial Analyst, IT, GROUPS, MEDIA, TECHNOLOGY
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