Magdalena Mielczarek – a Legal Advisor of our Law Firm, had the pleasure to appear as an expert in the latest issue of My Company Polska monthly magazine, where she discussed ESOPs as an idea for enhancing employee engagement in companies.

In the USA, ESOPs (Employee Stock Option Plans) are easy to implement and very often used. They can also be implemented in Poland, although it requires a bit more complicated formula. According to the data collected by Startup Poland, 25% of startups in Poland has decided to introduce them. Just 3-5 years ago, receiving shares was something extremely rare – only a few startups offered them to their employees. We have already written about the effectiveness of the ESOP in our article here.

The article indicates a number of benefits connected with having an ESOP in one’s business. As part of this form, without the use of money, a company may reward its employees by granting them ownership rights in the company, which are connected, among other things, with the right to dividend or benefits from the sale of such shares in the future upon potential increase of the company’s value, to which all program participants contribute.

As Magdalena Mielczarek points out, the vestment period in startups is usually stretched over 4-5 years, which is generally deemed a period of startup development determining its economic success, within which companies need attachments and loyalty of their employees. Real shares are a perfect tool for this purpose, giving their employees a sense of real “ownership” of a part of their company and contributing to its business as their own.

Currently, more and more funds require such type of a plan, therefore, the vast majority of companies supported by venture capital already have or are developing an ESOP. If you need legal advise in this field, do not hesitate to contact our Law Firm.