claim for esopearlier offered by company but now denied
Rajeev Ranjan
(Querist) 17 October 2009
This query is : Resolved
Hello Sirs,
My friend who joined a company in Gurgaon on 26th August 2008 which deals in trading. He is an M. Tech and at the time of joining he was offered ESOP (Employee Stock Option Plan) apart from the salary which will be decided by the Board of Directors. He along with two others joined there.
But in the Offer Letter nothing was mentioned in regard to ESOP. He was told that this is the policy of the company so no need to mention as because the decision in regard to this varies.
When he enquired about his ESOP the company denied the said offer saying that Board has decided none shares. He was never informed about the said decision.
So kindly suggest what are the remedies for him regarding his shares i.e. ESOP. How can he claim for that ?
Thanks,
Rajeev Ranjan.
A V Vishal
(Expert) 17 October 2009
ESOP is only an incentive given to the employee by the company in lieu of cash incentives, further, it is similar to a carrot and stick policy which prods the employee towards better productivity, in absence of any written agreement that the incentives will be given in form of ESOP, your friend cannot, unfortunately, proceed legally against the company.
joyce
(Expert) 17 October 2009
I agree with Vishal,the incentives are provided by the company just to motivate the empolyees, as ur friend told that it is the discission of BOD and as such it will be their discritionary power in them so if no written statements anywhere one cannot prove the verbal statments as it will be far more tough.
Adinath@Avinash Patil
(Expert) 18 October 2009
YOUR FREIND CANNOT PROCEED LEGAL ACTION AGAINST COMPANY FOR ESOP, APPOINTMENT LETTER IS SILENT ABOUT ESOP. THE INCENTIVES ARE FOR ONLY TO MOTIVATE EMPLOYEES,GENERALLY INCENTIVES ARE DISCRETIONARY POWERS OF COMPANY,YOUR FRIEND CANNOT ASK FOR AS OF RIGHT.
Raj Kumar Makkad
(Expert) 18 October 2009
My opinion is not different than the opinion of all other experts. No chance for legal action.
Sachin Bhatia
(Expert) 18 October 2009
Your friend can not take any legal action against company on this matter. Generally incentives are only for motivating the employees, this is not a right of employee.
Rajeev Ranjan
(Querist) 18 October 2009
thanks to all of you for kind responses.
