Infosys CEO Salil Parekh will get shares worth Rs 10 crore under a new employee stock option plan that the IT major launched for its employees as part of its revised performance criteria for the top executive. In addition, the software services provider has also changed Parekh’s employee agreement to enable him to vest the restricted stock units in 12 months instead of the earlier period of three years.
The company also expanded Stock Ownership Program 2019, which links long term employee incentives with shareholder value creation.
Parekh stated, "By making employees owners, they get an opportunity to be beneficiaries in the long term success of the company and realize the results of their work and dedication.”
He added that the employees are the company’s biggest asset, and through this programme it aims to recognize and reward individuals who are committed to driving value creation for all stakeholders through their continued and consistent performance.
The Infosys Expanded Stock Ownership Program 2019, under which grants will be vested based on performance, aims to align employee interest with shareholder value creation, incentivize, attract and retain key talent, and reward employee performance with ownership, the company said.
Subject to shareholder approval, the plan proposes to allocate 50 million shares (or 5 crore shares) equating 1.15% of the company's equity shares to a broad base of employees, as per a company release. Under the new plan, CEO U B Pravin Rao also gets shares worth Rs 4 crore.
While the move to provide incentives to employees, especially top executives, will benefit shareholders, yet the company’s attrition rate continues to remain high, as more technology professionals with skills in newer areas such as digital and analytics, leave for better opportunities. In 2016, the company had committed 1% of shares in an ESOP as it sought to counter attrition of employees. Attrition climbed to more than 18% by the end of the fourth quarter of the previous fiscal year, compared to 17.8% in the third quarter. Last November, in another move to curb attrition, the company also announced that it is doubling the salary of their employees who have completed the new bridge programmes.