NEW DELHI: In order to retain talent, India's second largest IT firm Infosys Thursday said its board has approved a series of performance-based incentives for its employees. This apart, the board also approved stock incentives for the company CEO Salil Parekh and COO U.B. Pravin Rao. Here are a few things to know about the decisions taken by its board.
1) 'Expanded Stock Ownership Program 2019' proposes to allocate five crore shares to incentivise employees based on performance. The grants will be vested strictly on performance. Accordingly, it is proposed to allocate a maximum limit of five crore shares (about 1.15% of the equity share capital) of the company under the 2019 Plan.
2) Infosys said it is proposed that CEO and Managing Director Salil Parekh be granted annual performance-based stock incentives in the form of restricted stock units (RSUs) worth ₹10 crore under the 2019 Plan. Similarly, it is also proposed that Infosys COO UB Pravin Rao be granted annual performance-based stock incentives in the form of RSUs worth ₹4 crore that will vest 12 months from the date of each grant.
3) The grants allocated to employees over a period of seven years will vest based on challenging performance criteria of relative Total Shareholder Return (TSR) against an industry peer group; relative TSR against domestic and global indices; and operating lead performance metrics. "Our employees are our biggest asset, and through this program we aim to recognise and reward individuals who are committed to driving value creation for all stakeholders... By making employees owners, they get an opportunity to be beneficiaries in the long term success of the company," Parekh said.
4) These measures come in the wake of the company's attrition being at 20.4% during the March 2019 quarter as compared to 19.5% in the year-ago period.
5) The new plan is different from Infosys' 2015 plan. “Under the 2015 plan, the grants were largely vested based on time, whereas under the 2019 plan, the grants will vest strictly on performance," the company said in an exchange filing.