ESOPs making a comeback?

It is probably after a long time that we are hearing “Employee stock options”. This was the buzz word, especially in IT companies in the early 2000’s but with the markets turning volatile, stocks no longer held any charm and companies started looking at other options to incentivize its employees.

But looks like Reliance Industries feels the time is right for employee stock options to once again make a comeback, maybe indicating the long term view they have of the market.

These options will be called ‘Long Term Incentive Plan (LTIP)’ and will be given to employees who have been the service of the company for three years. This will be 10-15% of their salaries and is obviously a move to retain talent. This bonus is only meant for their top 100 performers and may not be available for employees in other levels.  It is yet to be decided if the stocks will be given at face value, market value or at a discounted rate. 

Maybe this will usher in another new round of employee stock option from other companies, especially in troubled sectors like oil and gas where retaining and getting the right talent has become a challenge.