To set up and manage a company ESOP in Orchestra you need to be an administrator for the company.
For a step by step overview, have a look at our video below on creating an ESOP pool in Orchestra.
Setting up an ESOP in Orchestra
In the Orchestra menu select 'ESOP & Options' and select the 'Create pool' button.
ESOP pools are based on the amount of equity allocated by your company for the ESOP.
You can name the ESOP pool, confirm the type (options, phantom or loan to purchase shares) and enter the maximum number available in the pool.
For options, if you have a consistent exercise price and option expiry time frame then these parameters can be added as defaults for new grants.
Once your ESOP pool is created, you can see an overview of the details on your ESOP dashboard including the number of options at each stage (granted, vested, exercised).
You can create grants for each ESOP participant including the number of options, exercise price, start date and expiry date, and upload supporting documents (such as the signed offer letter).
Creating vesting schedules
For each grant, you create vesting schedules including regular or one-off automatic schedules or manual / performance-based schedules.
Inviting option holders to view their options
Once your ESOP participant has signed their offer letter, if they are new to Orchestra, you can invite them to access their ESOP details using the blue 'Invite' button on their grant.
You can also add a personalised message to the invitation.
Alternatively, if they have an exisiting Orchestra login you can email them through the Communications tool (How do I send shareholder communications to my shareholders?) so that they can view their new ESOP grant in Orchestra.
When option holders have vested options, these can be exercised and converted into shares.
This can be done within the ESOP screen to create a share transaction so that the company share register is updated and correct. The share details need to be entered and supporting documents (such as the option exercise notice from the employee) can be uploaded.
You can set up a named funding round (eg. ESOP Exercise) to use as a reference on the share transaction list.
You can also add a personalised message in the share transaction notification, so if this is the first time an employee is becoming a shareholder in your company, you can include a welcome message to them.
Subject to your company’s requirements for the selling and purchasing of shares, share transactions can be managed through the share transfer process in Orchestra.