Every time I have to set up new ESXi and add Ubuntu machine templates I’m getting into the same troubles, now writing it down to remember…
VmWare tools and clipboard are not working in Ubuntu desktop, so for the recent Ubuntu versions (14.xx, 16.xx):

1. In the ESXi host add the last 2 lines to the config and reboot:
[root@esxi1:~] cat /etc/vmware/config
libdir = “/usr/lib/vmware”
authd.proxy.nfc = “vmware-hostd:ha-nfc”
authd.proxy.nfcssl = “vmware-hostd:ha-nfcssl”
authd.proxy.vpxa-nfcssl = “vmware-vpxa:vpxa-nfcssl”
authd.proxy.vpxa-nfc = “vmware-vpxa:vpxa-nfc”
authd.fullpath = “/sbin/authd”
isolation.tools.copy.disable=”FALSE”
isolation.tools.paste.disable=”FALSE”

2. In the Ubuntu guest instead of installing the tools bundled with ESXi:
sudo apt-get install open-vm-tools-desktop