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Firms see Esop wealth erode amid market rout

India city Mumbai covid-19 outbreak
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MUMBAI : The wealth of corporate India’s top managers derived from employee stock ownership plan (Esop) has seen a massive erosion in value as the Covid-19 outbreak has pushed stock prices of companies to new lows, resulting in margin calls on loans availed to exercise these stock options.

The sharp fall in stock prices, coupled with pressure from lenders to bring in more collateral against these loans, has in some instances, led senior executives to sell these shares at depressed prices just to get the loans off their backs.

Employees can exercise Esops at a preset price, which is generally at a discount to the prevailing market price. These options can be exercised within a certain period.

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COVID-19
United States
United States
Cases: 46 252 513
Deaths: 750 423
Recovered: 0
India
India
Cases: 34 321 025
Deaths: 459 652
Recovered: 0
Brazil
Brazil
Cases: 21 835 785
Deaths: 608 235
Recovered: 0
United Kingdom
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Cases: 9 215 683
Deaths: 141 607
Recovered: 0
Russia
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Cases: 8 494 589
Deaths: 237 619
Recovered: 0
Detail statistic
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