About
28th January 2011, the Sampath Bank PLC announced to Colombo Stoke Exchange, the board deiced to Introduce Employee Share Option Plan [ESOP] for 2011 conditional upon the bank achieving certain performance criteria for 2011.
Under proposed ESOP 2% of new shares will be created [3,056,159] and offered to the eligible staffs upon achieving their set targets. The offer price would be weighted average price of last week of January 2011, and discount of 10%.
The vesting period of the ESOP will be from 1year after the offer date of 1st April 2011 and end on 1st April 2012. The option exercisable period will be 3 years from 1st April 2012.
Benefits of Employee Share Option Plan [ESOP] and market reaction
The Employee Share Option Plan [ESOP] will be a one of the staff motivational approach followed by the listed companies. This approach may help the Company to improve the Company performance, by creating the staffs to be an owner of the business.
The trend of the Employee Share Option Plan [ESOP] is seems to be like rights issue, but with certain rules and regulations about trading. Therefore market will show a slight trend of share price reduction cause of ESOP, but it will be only for short term trend and will picks up again.
Source: http://www.cse.lk/cmt/upload_cse_announcements/7331296188156_.pdf
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