Indian Government Considers Replacing Incentive Pay with Stock Options

The Indian Finance Ministry proposed that state-owned enterprises be required to provide all performance-related pay to executives in the form of stock options, known in India as employee stock option plans (ESOPs); as with China, the acronym refers to something quite different from a US ESOP. An unnamed source at the Finance Ministry, quoted in an article in the Economic Times, said, "By giving ESOPs as variable pay package both the employee and the company benefit." Currently, a portion of performance pay may be given in the form of stock options, but only if the employee agrees.