Cost Governance for Employee Stock Ownership Plan: A Study on ESOPs in Indian Industries

Abstract

Cost Governance consists of the set of policies, principles, processes, customs and laws which facilitates utilization of resources by an enterprise and optimum resource productivity. ESOPs are the one of the factor which is helpful for the cost governance in terms of employee cost and effective utilization of human resources. ESOPs originally were created with the idea that employees, given an ownership portion in the company, would have the incentive to increase its productivity and performance. Now a day's companies are issuing ESOPs where human resources are significant. ESOPs found to be positively associated with the many companies performance specifically companies in computer Software Industry. ESOPs are useful for increase in productivity and development of company. Effective Stock ownership to employees is also one of the factor for the Cost governance because systematic human resources cost like compensation to the employees in terms of Stock ownership will increase the productivity and profit. Here taken many industries and considered where the ESOPs are playing vital role like Industries Computer Software industry, Drugs and Pharmaceuticals, Industrial Construction and Telecommunications industry. Specifically the percentage of ESOPs increased but there is no significant growth except computer software Industry. New Innovations, Research and Developments and upcoming Patents and Copyrights will lead the subsequent ESOPs in industries.