In what may be a first for a large Indian conglomerate, Mahindra & Mahindra is launching a one-time Employee Stock Ownership Plan (ESOP) to almost 23,000 shop floor workers, the group’s CEO and MD, Anish Shah said.
He said that since the diversified group’s market cap had grown 12 times since April 2020, the group felt it was important to acknowledge it by rewarding its employees for their contribution to the company’s growth.
“So this is something that I am very happy about and very proud about our company's culture because these ESOPs are for every single person in the company. This is effectively a token of gratitude, because their efforts have helped us do extremely well,” he said.
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The initiative covers three of Mahindra’s key subsidiaries – Mahindra & Mahindra (auto and farm sectors), Mahindra Electric Automobile (MEAL), and Mahindra Last Mile Mobility, and the total disbursement would be between ₹400-500 crore, ‘depending on factors’, Shah said.
"It (₹400 crore to ₹500 crore) is a very significant amount, but as I look at it, overall, the value creation they (workers) have led is a lot more," he said.
The shares will be granted in the form of restricted stock units (RSUs) and employees on the permanent payroll with a minimum of 12 months’ service within the group will be eligible to receive the ESOPs.
The plan aims to reward long-term contributions and align employee efforts with the company's wealth creation, the CEO added.
Mahindra & Mahindra has posted a 24 per cent year-on-year increase in consolidated net profit to ₹4,083 crore for the June quarter, driven by broad-based growth across business verticals.
The company reported a net profit of ₹3,283 crore for the April-June period of the last fiscal.
Total income from operations rose to ₹45,529 crore in the June quarter against ₹37,218 crore in the year-ago period.
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