CloudTalk’s ESOP journey

Background

CloudTalk is a next generation calling software helping businesses connect with their customers. Headquartered in Slovakia, CloudTalk has 140 employees spread across 20+ countries.

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CloudTalk strongly believes that customer experience can give businesses a crucial competitive edge. It also believes that ESOP (Employee Stock Ownership Plan) is a key component to having a dedicated and engaged team. 

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ESOP structure

CloudTalk decided to use a phantom (virtual) plan, which is simple to set up and manage. Even though phantom shares aren’t real shares, they entitle their owners to a cash bonus payable typically on exit. This plan is also perfect for companies like CloudTalk headquartered in countries where typical ESOP plans based on stock options aren’t tax efficient.

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In terms of awards & vesting, CloudTalk values flexibility above all. With respect to award types, they use both standard standalone (virtual shares granted on top of cash salary component) and swap awards which allow employees to exchange a part of their salary component (typically a salary increase or a bonus) for equity.

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CloudTalk also takes full benefit of flexible vesting parameters (vesting period, cliff and vesting schedule) which allows them to implement a versatile compensation structure for their team.

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Benefits of ESOP 

The main advantage of the ESOP for CloudTalk is that it enables every CloudTalk-er to participate in the company's growth. Additionally, CloudTalk's ESOP has fostered a sense of collective purpose, keeping everyone engaged and motivated to build a successful global company.

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"Our ESOP unites us with a singular objective: turning CloudTalk into a global success," Linda, CloudTalk’s ESOP operator, comments.

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Benefits of the Eldison platform 

Managing ESOP can be complex, especially when implementing swap awards for the whole company. Since adopting our platform in 2021, CloudTalk has been able to significantly reduce the time and effort required to complete each round of awards.

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Bulk awards feature

Before the Eldison platform, CloudTalk had to manually process around 150 awards per quarter. With Eldison’s bulk award feature, the internal ESOP operator can process multiple awards at the same time, making the award process efficient by minimizing the need for manual input.

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HR system integration 

Eldison integrates with CloudTalk’s BambooHR which means that all employee data is automatically updated in the Eldison platform. This keeps our records up-to-date without any manual input.

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Reporting 

Understanding ESOP data is crucial for multiple company stakeholders. CloudTalk exports its ESOP data like award details and status from the Eldison platform. This data is used across company departments for reporting.

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In a nutshell

CloudTalk's adoption of ESOP shows the company's dedication to its team and its vision. Their decision to use swap awards besides the standard standalone awards is a win-win for both the company and their team. People can opt out for ESOP instead of salary increase or one-off bonus, allowing them to invest in the company and potentially receive higher cash benefit on exit. As CloudTalk moves forward, its ESOP remains a testament to its core belief - shared success.

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Key takeaways

• CloudTalk launched ESOP after its Series A round in May 2021.
• They opted for a phantom plan due to its simple and inexpensive setup.
• The goal behind adopting ESOP was to let every employee share in the company’s growth.
• CloudTalk uses swap awards on top of standard standalone awards which allow employees to exchange their bonus or salary increase for equity. 
• The bulk award feature in the Eldison platform helped CloudTalk save a lot of time on managing ESOP.
• Our integration with CloudTalk’s BambooHR decreased manual input and limited errors.

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Are you planning to launch an ESOP in your company? Learn more about our end-to-end ESOP platform here.