ESOP (Israeli)
The reserved equity pool for employees — run in Israel through the Section 102 trustee track.
Definition. An ESOP (Employee Stock Option Plan) is the reserved pool of company equity set aside to compensate employees — administered in Israel through the trustee mechanics of Section 102.
The ESOP pool, typically 10–15% of fully diluted shares, is how Israeli startups attract talent that could otherwise command higher cash salaries. Its size is negotiated at each round because expanding the pool dilutes existing holders. In Israel the pool runs through the Section 102 capital-gains track and an approved trustee, which is what makes the resulting employee gains tax-efficient. ESOP design — pool size, vesting (commonly four years with a one-year cliff), and acceleration on a Secondary Sale or acquisition — is a core lever in the Israeli talent market, where alumni of Unit 8200 and elite tech units weigh equity offers across competing startups.
