Indian IT major Infosys has announced a new employee stock ownership plan (ESOP) for its employees. The company will issue shares worth ₹9.2 billion ($125 million) under two different schemes, the 2015 Stock Incentive Compensation Plan and the 2018 Stock Incentive Compensation Plan.
The announcement comes after Infosys reported strong financial results, with a 16.6% rise in net profit for the December 2020 quarter. The ESOP scheme is aimed at motivating and retaining employees by rewarding them with equity shares of the company.
Under the 2015 Stock Incentive Compensation Plan, Infosys will issue 5,26,000 equity shares to eligible employees, while under the 2018 plan, it will issue 2,09,000 equity shares. The eligibility criteria for both plans include the employee’s performance, designation, and salary band.
The ESOP will vest over a period of four years, with 25% of the shares being vested in the first year, followed by 25% in the second year, and the remaining 50% in the third and fourth years.
Infosys has been known to reward its employees with stock options in the past. In 2015, the company issued shares worth ₹1,174 crore ($157 million) to its employees under the 2011 Stock Incentive Compensation Plan.
The move by Infosys to issue ESOPs to its employees is likely to boost employee morale and incentivize them to work harder. The company’s CEO, Salil Parekh, has said that the scheme is part of the company’s commitment to creating long-term value for its employees.
The shares issued to the employees will be listed on the stock exchanges in India and the United States.
The announcement by Infosys has been received positively by analysts and investors, with the company’s shares rising by 2.3% in early trade on Wednesday.
