PremiumMUMBAI : JSW Group on Monday joined a handful of Indian companies that offer stock options to blue-collar as well as white-collar workers. It will help several thousand employees to generate wealth, the company said.
Manufacturing firms typically offer employee stock options (Esops) to their mid- and senior-level employees, leaving out blue-collar workers from the benefit. For a while, Infosys had extended Esops to both blue- and white-collar workers. On Monday, One97 Communications, the parent of Paytm, too, said that it will be expanding its Esop pool, and will be holding an extraordinary general meeting (EGM) on 2 September to seek approval.
Listed entities, such as JSW Energy and JSW Steel, have rolled out Esops for 16,000 employees, offering over 16 million shares, the company said.
While employees get ownership interest in the company through Esops, companies save cash by rewarding employees with stocks. As part of the programme, the firm sets up a trust fund wherein it either contributes new shares or cash for buying existing shares. “It will cover all employees of the steel and energy unit, from the shop-floor employee to the middle level to top management," Dilip Pattanayak, president, human resources, JSW Group, said. At current market value, this is an over ₹1,000 crore wealth-generation initiative, he added.
JSW plans to run the programme through its employee welfare trust, which will procure shares from the secondary market and allocate them to the employees on the days of vesting and exercise by the employees. The plan was approved by its board and shareholders at the annual general meeting. “Since we are doing a secondary market purchase, there is no dilution to the existing share pattern. So I do not see any concern from our retail shareholders," said Pattanayak.
The stock options will be vested over a period of four years wherein 25% each will be vested after the first and second year and the rest after the fourth year. “We have the approval to go ahead with the plans for 1.30 crore shares in JSW Steel and 32 lakh shares in JSW Energy. This corresponds to 0.54% of our paid-up equity in JSW Steel and 0.20% of our paid-up equity in JSW Energy," added Pattanayak.
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