| Question And Answer | |
|---|---|
| Subject: | UNEUQUAL ALLOCATION OF SHARES UNDER ESOP TO EMPLOYEES |
| Category: | Companies Act |
| Querist: | DB |
| Answered by: | Law Intern |
| Tags: | equity shares with differential rights, ESOP |
| Date: | May 29, 2025 |
Can a company issue different shares to the employees under the esop policy for example those who work less they get equity shares with differential rights and to the good employees they give equity shares with voting rights.
Section 43 of the Companies Act, 2013 allows companies to issue equity shares with differential rights as to voting, dividends, or other privileges. So, a company can design an ESOP policy to allocate non-voting equity shares to employees with shorter tenure or lower performance and voting equity shares to high-performing or senior employees.
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