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ESOP Valuation Services and Advisory Solutions
Your reliable ESOP valuation company in Singapore! We offer reliable ESOP valuation services and advisory solutions. Independent and sophisticated valuation solutions.
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We are a specialized valuation company providing end-to-end assessment services. Our team has extensive experience in the field of valuation
Our tested ESOP valuation process and approach are entirely transparent with no hidden costs.
We are a team of finance professionals with more than 20 years of valuations experience.
Our goal is to provide business valuation services that fit our client’s budget.
At Valueteam, we ensure that the cost associated with your ESOP is adequately estimated and recorded. We apply various models using industry knowledge and experience to provide the right ESOP valuation and calculation. We will help you in considering relevant factors and variables based on guidelines and standards applicable to the company and its industry.
COMPANY VALUATION FOR ESOP ISSUANCE
We conduct detailed and comprehensive valuation exercises to determine the right value of a business so that you can issue ESOPs at the right price. We assist our clients in calculating the fair value of equity to be issued to new or existing employees and provide other consulting services related to the allocation of ESOPs.
REPORTING AND DISCLOSURES
We assist clients in reporting and disclosing ESOPs based on current guidelines and accounting practices. We help in calculating the fair value of ESOPs and the allocation of their related cost in the financial statements for reporting purposes. We provide one-time or annual advisory and valuation services on ESOPs depending on our client’s needs
KEY COMPONENTS IN AN EMPLOYEE STOCK OPTION PLAN
Valueteam’s professional team can understand client requirement and provide targeted and cost-effective solutions with high-quality services With our deep-rooted research mindsets we can provide high-quality services with customised process and approach.
The option pool contains a part of the venture’s shares that can be given in options to the workforce in the forthcoming time. The ESOP defines the number of shares in the option pool and the class of shares it encompasses.
Most of the time, the option pool comprises nonvoting shares so that the employees can be at an advantage as the company progresses without having to vote for management problems. The size of the option pool should be carefully formulated. Usually, business founders opt for a conventionally sized pool to prevent their ownership dilution.
In contrast, employees, investors, and other shareholders opt for a large-sized option pool to get ample options. As long as the option pool exists, its shares cannot be utilized for any other reason.
The option pool is visible on the company’s cap table to indicate that they do not belong to its founders. However, materialistically, these shares are not owned by anyone and hence do not affect the founders’ ownership till they are given.
OPTION AWARD AGREEMENT
The actual agreement between the company and an employee that reflects the terms and conditions or the receiving options related to the awarding of stock options is the option award agreement. The option award agreement states each of the employee’s options, whereas the ESOP is the policy document.
The agreement mentions the various options given to each of the staff members. It also specifies the Exercise price that each of the employees should pay to obtain the shares. The ESOP must comprise a generalized sample of the option award agreement, enabling all the contracts to follow a standard form. However, the option award agreement should be tailored every time a staff member signs it.
OPTION EXERCISE PRICE
The option exercise price is also known as the strike price. It indicates the price that each workforce member has to pay to buy the shares in the future. The option exercise price must be fixed in the option award agreement, although it is not paid right away. The workforce will obtain the most benefit from a lower exercise price.
However, the exercise price cannot be meager because it can have negative tax implications on the company and its employees. It should indicate the fair market value of the shares on the date choices and not when the stakes are bought.
It needs a practical evaluation of the present fair market value of a company’s shares every time an option is given. We, at Valueteam, can suggest the most suitable exercise price for providing options. Moreover, the options denote the present value of the shares and enable the workforce to get benefits from the venture’s progress.
OPTION EXPIRY DATE
As the total number of options in an option pool is restricted as per the conditions in the option pool, options have predefined expiration timelines. It helps the company re-issue the shares to another employee when an employee does not want to change the options into shares by buying at the exercise price.
The option expiry date is of significance when employees quit their jobs. Such employees will have a fixed number of days to use the options and buy the shares. If the employees fail to act within the fixed timelines, the options’ expiry occurs, and the options get accumulated into the option pool.
The other usual expiration timelines are when the employees’ options have entirely vested. In such a situation, the employees should determine if they want to use the options and buy shares. If the options are not used after completely vesting, they will get accumulated in the option pool.
OUR ESOP VALUATION MODELS
Our experts help companies in creating detailed and effective business plans and financial projections, which will help you to raise capital, buyor sell businesses. We make financial models as per the industry standards, which are acceptable by all banks and financial investors. We focus on understanding your business and creating customized and robust financial models.
Valueteam can help you to draft a convincing business plan for gaining confidence and investments from venture capitalists, private equity to business angels.
If you are an entrepreneur, then it is never too late to think differently. Valueteam can help you in strategically planning your business goals and objectives. Our effective strategic planning solutions can elevate your company profile, thereby increasing your venture’s success.
HOW DOES VALUATION HELP YOUR BUSINESS?
Benefits of valuing a business
Business valuation can help you to buy or sell a business with ease, discuss better terms with the buyers or sellers of the company and choose the right time for selling or buying a business.
Periodic valuation is a good practice because it helps you evaluate and appraise your business functioning; uncover business areas that need improvement, and quickly raise capital for your business
ESOPS IN SINGAPORE
In Singapore, three employee share incentive plans have been implemented in companies as follows:
Employee share option plan (ESOP) – In this plan, the employees are awarded a right but not a requirement to buy the company shares in the future at a pre-set price irrespective of the fair market value of the shares at the time of being awarded.
Employee share awards plan (ESAP) – The ESAP plan permits companies to grant actual shares to their workforce and not give options for free.
Phantom share option plan (PSOP) – In this plan, the staff members receive a cash bonus for the rise in the company’s stock value for a particular time duration.
The ESOP models in Singapore are under multiple regulations, such as the Singapore Companies Act, Singapore taxation regulations, listing manual of Stock Exchanges of Singapore, etc. The Singapore companies should conduct a general stakeholders’ meeting to obtain their approval for the adoption of the ESOPs.
WHAT IS AN ESOP?
WHY TAKE UP ESOP VALUATION?
WHY ARE ESOPS WIDESPREAD?
WHAT IS THE BASIS OF DISTRIBUTING SHARES AMONG EMPLOYEES UNDER THE ESOP SCHEME?
HOW FREQUENTLY ARE ESOP VALUATIONS DONE?
We assist in the valuation of target companies, PPA, and EPS analysis, both pre and post-transaction.
We provide all kinds of intangibles like patents, trademarks, IPs etc valuation services for our clients.