The board of software company Infosys on Thursday approved allotting performance-based shares to its techies, linking employee incentives with shareholder value creation.
"The board of directors approved expanded stock ownership programme 2019, linking long-term employee incentives with shareholder value creation," the city-based IT major in a statement.
On shareholders' approval, about 5 crore shares of Rs 5 face value will be allocated to employees on the basis of their performance. The shares for allotment under the stock ownership plan are equivalent to 1.15 per cent of the company's total equity shares.
The $11.8 billion company has been a pioneer in rewarding its employees through stock ownership programmes since 1994, including the 2015 incentive compensation plan.
The grants to employees over seven years will be based on 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.
"As we have been a pioneer for many firsts in India, the performance-based stock ownership scheme is a milestone as it sets another benchmark in the industry," Chief Executive Salil Parekh said.
Through the scheme, the firm aims to recognise and reward those techies committed to driving value creation for stakeholders through consistent performance.
"By making employees owners, they get an opportunity to be beneficiaries in the long-term success of the company and realise the results of their work and dedication," Parekh added.
The company's blue-chip scrip gained Rs 17.70 per share to close at Rs 734.20 at the end of Thursday's trading on the BSE as against Wednesday's closing rate of Rs 716.50 and opening price of Rs 716.75.
The software major also granted blue-chip shares valued at Rs. 4 crore at market price to its Chief Operating Officer UB Pravin Rao as an incentive.
"The grant of stock incentives to Rao is to incentivise him to increase shareholder value and drive execution excellence of the business strategy," the city-based IT major in a regulatory filing to the BSE.
On approval by shareholders, Rao will be allotted the shares under the expanded stock ownership programme - 2019 annual performance equity grant.
The stock will vest with him for 12 months from the date of each grant, which is based on the performance criteria mentioned in the 2019 plan.