Stock-based compensation such as ESOS is widely used to reward, motivate and retain directors and employees for their contributions to a company's performance. Proponents believe stock options can effectively align the interests of managers, employees and shareholders.
At the same time, opponents argue that the mechanism of ESOS is flawed and highly contentious. They argue that executives can make a fortune from options when shares go up in value, but executives are not worse off when share prices fall as they can choose not to exercise the options.
With regard to this, the ESOS of a local listed company serves as an interesting case study.”