Malaysian companies explore alternative employee benefits

To retain talent and boost productivity, companies are offering employee stock option plans (ESOPs) to their employees.
By: | August 10, 2022

ESOPs are stock options granted to employees in a company in a form of equity compensation that gives an investor the right, but not the obligation, to buy or sell a stock at an agreed-upon price and date. The price and quantity of the shares are usually predetermined by the company.

Different from the standard exchange-traded options, ESOPs are not generally traded on the exchange. For certain companies, employees would need to wait for a specified time before they can carry out the option.

One such company that has been giving out ESOPs to its employees is Funding Societies, a South-East Asian digital financing platform for SMEs with operations in Malaysia, Singapore, Indonesia, Thailand, Vietnam, and India.

Its spokesperson Chai Kien Poon said the implementation of ESOPs has helped the company strengthen itself against competitors, and added, “As ESOP provides employees with a sense of ownership in the company, this enhances their job satisfaction and morale, and subsequently helps us with employee retention.”

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He reported that since implementing ESOP, the company has seen its lowest employee attrition rate and highest employee happiness scores. ESOPs can also serve as an incentive to encourage employees to contribute above and beyond their immediate roles and responsibilities, he said, according to Vulcan Post.