The Tata Group has completed the implementation of Air India’s employee share benefit scheme by allocating 98 crore shares to the airline’s permanent employees. These shares account for approximately 3% of the airline’s equity.
“We received letters regarding our share on March 28th.”an airline employee said
Air India staff stock option plan
The company launched the employee share benefit scheme for permanent employees of Air India and Air India Express earlier this year, in January 2023. The airline had approximately 12,085 employees at the time of its privatisation, of which 8,084 were permanent employees. After Tata Motors and Tata Digital, Air India is the third company under the Tata Group umbrella to offer stock options to employees. Unlike the other two schemes, Air India’s Esop scheme was decided as part of the national carrier’s divestment.
“Under the scheme, employees will pay 27 paisa plus taxes for a share, and the book value has been set at 87 paisa per share value.”said another person
SBI Caps Trustee Co. Ltd. implemented the scheme, which offered employees approximately 3% of the company’s equity share capital. The scheme proposed that SBI Caps first acquire shares worth approximately 3% of Air India’s equity share capital from Air India’s holding company Talace Private Ltd and then assign shares to each eligible employee.
The scheme will allow employees to redeem their stock options once a year, according to the person, who added that employees must make payments within a year to exercise the stock option benefit.
“In accordance with the share purchase agreement signed as part of the disinvestment process, Air India has launched the Employee Share Benefit Scheme for eligible employees who were working for the airline at the time of privatisation.”
“We will work with the relevant employees to help them understand and take advantage of the long-term benefits.””According to an Air India spokesperson
Airlines providing employee share benefit scheme
IndiGo, India’s largest airline, has had such a scheme for its senior executives since its inception. The company board approved the grant of 67,150 Performance Stock Units to Chief Executive Officer Pieter Elbers under the InterGlobe Aviation Ltd – Employees Stock Option Scheme 2015 on March 23. SpiceJet, a low-cost carrier, also extended its employee stock ownership plan to several mid-level employees in 2022. Akasa Air, India’s newest airline, has also stated that it intends to implement an employee stock ownership plan for its employees.
On January 27, 2023, Air India completed a year of privatisation under the Tata Group. This year, the company also made history by placing a massive order for 470 planes, with an option to purchase an additional 370 planes. The airline recently implemented the second phase of its voluntary retirement scheme and hopes to reduce its permanent employee count by another 2,000. Senior Air India executives previously told Mint that the airline had set aside Rs 200 crore for the initiative.
Following the Tatas’ acquisition of the national carrier in June 2022, approximately 1,500 employees took advantage of the first VRS offer under the new management.
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