An Employee Stock Option Plan (ESOP) is a financial program that grants employees the right to buy company shares at a fixed price, often below the current market value. Designed to align employee interests with company performance, ESOPs serve as a tool for attracting, retaining, and motivating talent. Employees receive stock options that vest over time, meaning they can purchase shares after a specified period or upon meeting certain conditions. This plan not only provides potential financial gains but also fosters a sense of ownership and commitment. Implementing an ESOP requires adherence to legal regulations and clear communication of terms and benefits.