Infosys to allocate 50 million shares to employees
17 May 2019
Infosys, the country’s second-largest IT software service company, on Wednesday announced an `Expanded Stock Ownership Programme 2910’, under which the company will allocate 50 million shares to employees based on performance.
The plan is aligned to shareholder value creation and is intended to broaden and deepen employee ownership of the company, Infosys stated in a release.
Infosys said the benchmark stock ownership programme, approved by its board of directors, proposes to allocate 50 million shares (or 1.15 per cent of the company’s equity shares) to a broad base of employees over a period of seven years.
“The Expanded Stock Ownership Program 2019, under which grants will vest based on performance, aims to align employee interest with shareholder value creation, incentivise, attract and retain key talent, and reward employee performance with ownership,” Infosys stated in the release.
The stocks will be allocated to employees over a period of seven years, 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 such as total revenue and digital revenue growth, and operating margins.
Salil Parekh, chief executive officer and managing director, Infosys, said, Infosys has been a pioneer for many firsts in India, and the programme is a key milestone as it sets another benchmark in the industry.
“Our employees are our biggest asset, and through this programme we aim to recognise and reward individuals who are committed to driving value creation for all stakeholders through their continued and consistent performance,” he added
The proposal is subject to shareholder approval.
In a regulatory filing, Infosys termed the latest programme '2019 Plan' as being "distinct" from previous plan of 2015 where the granted shares largely vested based on time.
The 2019 Plan will be effective on and from the date of receipt of approval of the shareholders, the filing noted.
At the end of March 2019 quarter, Infosys had a total employee base of over 2.28 lakh. Its attrition (annualised consolidated) during the quarter was 20.4 per cent compared to 19.5 per cent in the year-ago period.
In April, Infosys had said it will roll out an incentive scheme this year for employees equipped with digital skills and will aggressively re-deploy staff on projects offering opportunities to work on new technologies.