Designing ESOP for corporate startups: aligning risk, effort, and equity expectations in a Thai conglomerate

Purpose This paper asks how employee stock ownership plans (ESOP) should be designed for corporate startups, and why such designs so often fail to align expectations. It aims to examine the tension between employees who ground equity claims in effort and leaders who ground them in risk-bearing. Design/methodology/approach A qualitative case study was conducted at a major Thai conglomerate operating two parallel innovation tracks: a relationship-based flagship venture and a merit-based stage-gate programme. Twenty-three semi-structured interviews covered 15 internal and eight external informants. Data were analysed thematically following Braun and Clarke (2006). Findings Employees and leaders reasoned from different premises about what equity compensates: effort versus risk-bearing. A convergent theme was reluctance to trade salary for equity – but that equity had never been specified. Its amount, the contribution required to obtain it, and the route by which it could become cash were all undefined. Differing accountability across the two tracks destabilized the design further. Research limitations/implications Findings derive from a single Thai conglomerate, so analytical rather than statistical generalization applies. Future research could test whether the effort–risk tension persists once the equity offered is fully specified. Practical implications The paper offers a four-step framework: classify the venture by intended destination; define what risk equity compensates; apply consistent rules across tracks; and define how ownership becomes cash. Unrealizable equity is not compensation. Originality/value To the best of the authors’ knowledge, this is the first inside-the-firm account of ESOP design across parallel corporate startup programmes in an Asian conglomerate, identifying an institutional precondition – an exit market – that equity practice assumes but rarely examines.