Explanation

Under employee stock option plans,options are issued to the employees at the current market price. So, when the employees work hard to increase the value of the company, the stock price rises, then eventually increasing the stock price.
Before investing in stock options, employees analyse the options on the basis of current profitability and future profit earnings capabilities of the firm. Thereby, employees who own ESOPs will gain in case the company is profitable in the long run. This is because the share prices will increase in the long run which will be beneficial for ESOP holders, even if the share prices are not as per the shareholder's forecast.

Verified Answer

The options are issued to the employees at the current market price. With the ownership rights, the employees work hard to increase the wealth of the firm in order to earn higher returns and eventually increase the stock price.
Although, the employees make a complete investigation related to securities before making investments. So, if a company is profitable in the long-run, the stock price will increase which is valuable for the employee stock options even if the company's share price is not as per expectations.