hi can you tell me something about the concepts of "Stock taking and manpower mapping and how it is used by managers in manpower planning? waiting for your reply shieba
From India, Faridabad
From India, Faridabad
It Seems You Did Nothing Sort Of Degree Of Diploma In Human Resources.
According To Internatinal Labour Organization :
"labour Or Human Resource Is Not Commodity"
So You Cannot Us E Word "stocktaking..." As Applicable To The Materials...
As Far As Word "mapping" Is Concern It Means "analysis"
Badlu
From Saudi Arabia
15According To Internatinal Labour Organization :
"labour Or Human Resource Is Not Commodity"
So You Cannot Us E Word "stocktaking..." As Applicable To The Materials...
As Far As Word "mapping" Is Concern It Means "analysis"
Badlu
From Saudi Arabia
SHIEBA,
CONCEPT " stock taking and manpower mapping".
HERE IS SOME USEFUL MATERIAL.
REGARDS
LEO LINGHAM
=================================
STOCK TAKING
-taking counts human resources in quantitative / qualtitative terms,
in an organization.
STEP 1---REVIEW THE FOLLOWING
-Corporate Mission
-Corporate Objective
-Corporate Strategy
-Corporate Organization Policy/ Budget Guidelines.
-Corporate HR objective/ strategy
-Corporate Industrial Relations Policy
=====================================
STEP 2 --- CONDUCT HR AUDIT
[ IN SOME ORGANIZATIONS, THEY SKIP THIS STEP
AND GO STRAIGHT INTO ''HR PLANNING''.
The Human Resources (HR) Audit is a process of examining policies, procedures, documentation,
systems, and practices with respect to an organization’s HR functions.
PURPOSE
The purpose of the audit is to
reveal the strengths and weaknesses in the human resources system, and any issues needing
resolution.
The audit itself is a diagnostic tool, not a prescriptive instrument. It will help you identify what you are
missing or need to improve, but it can’t tell you what you need to do to address these issues. It is most
useful when an organization is ready to act on the findings, and to evolve its HR function to a level where
its full potential to support the organization’s mission and objectives can be realized.
FOR EFFECTIVENESS/ EFFICIENCY
Like any other function, the performance and contribution of HR should be audited
regularly. The questions to which answers should be obtained are:
1. What strategic contribution is being made by HR to the achievement of business/corporate objectives?
2. To what extent are there well-articulated and agreed HR strategies which are aligned to the business strategy and which are integrated with one another?
3. What role does HR currently play? Is this role appropriate in the context of the organization?
4. To what extent has the responsibility for HR issues been devolved to the management?
5. How well does HR reconcile the need for devolution with the need to ensure that organizational, ethical and legal obligations and requirements are being mf consistently?
6. What evidence exists that HR is being innovative in a practical and business way, based on an analysis of the business and people needs of the organizational and benchmarking?
7. How well is HR performing by reference to quantitative measures such as added value per employee, absenteeism and attrition?
8. How well is HR performing in terms of service delivery in fields such as recruitment, training, reward management, health and safety, the management of equal opportunity and diversity, advice on employment law and legal obligations, the provision of employee assistance programmes and the maintenance and use of personnel information systems?
9. To what extent does HR express proper concern for ethical considerations, the interests of all stakeholders (employees as well as management), enhancing the quality of working life and achieving a satisfactory work/life balance?
10. What ' contribution has HR made to the improvement of the employee relations climate?
11. How well is HR regarded by its customers - management, line managers, employees generally, employee representatives, as measured by formal assessments or opinion surveys?
12. Is the HR function well-organized and properly staffed with qualified professionals who are actively concerned with continuous professional development?
Who should conduct the audit?
The team that is responsible for the audit should represent a cross-section of the organization’s staff,
including line staff, middle and upper management, and those responsible for HR functions.
or you may use an external consultant to assist.
How should it be conducted?
The audit process consists of a series of questions covering the primary components of the HR
function:
-Roles, head count, and HR information systems (HRIS)
. Recruitment
. Documentation
. Training, development, and career management
. Compensation and benefits
. Performance measurement and evaluation
. Termination and transition
. Legal issues and personnel policies
9. Health / Welfare systems
10.Employee Relations
11. Safety
12. Resourcing
PLUS ANY OTHER ITEMS PERTAINING TO YOUR ORGANIZATION
The team works to collect information to answer the HR audit questions in each of these categories. The
focus is on how these activities and tasks are actually performed in the organization. The first step is to
collect all the pertinent information. The process of getting information, in and of itself, can be quite
informative.
============================================
How are needed improvements identified?
Once information is gathered, the audit team reviews each major section and notes disparities between
paper (what we think or say we do) and practice (what we actually do, as revealed by the answers to the
audit questions). This can then be compared to best practice (what we should do to best support our
organization’s mission).
How is follow-up and correction done?
ACTION PLAN WITH TIME FRAME.
Improving the HR system takes some time. A workplan — with a timeline, accountability, and
deliverables — should be created after the team reviews the completed audit and identifies areas where
improvement is needed. Follow-up and review should be a regular management function, performed on
an ongoing basis.
=================================================
STEP 3 - HR PLANNING
STEP A
Discuss with the various other departments like sales/ production/
distribution/accounting/ IT etc about their requirements
-for manpower
-recruitments
-replacements
-training
etc etc
Once HRM gets their departmental requirements, HRM develops
-HUMAN RESOURCE PLANNING
which includes
-recruitment /selection plans / programs/ procedures/ priorities
-training plans / programs/ procedures/ priorities
-rewards plans / programs/ procedures/ priorities
-development plans / programs/ procedures/ priorities
-payroll plans / programs/ procedures/ priorities
- performance management plans / programs/ procedures/ priorities
-staff/organization communication plans / programs/ procedures/ priorities
etc etc
-HR POLICIES
-HR PROCEDURES
-HR PRACTICES.
ETC.
================================================== ========
STEP 4
NOW THE HR MANAGEMENT DEVELOPS
MANPOWER PLANNING IN CONJUNCTION WITH THE
DEPARTMENT MANAGERS/ LINE MANAGERS.
Manpower Planning includes
1.Assessment / Audit of the current manpower profile
-numbers
-skills
-ages
-flexibility
-sex
-experience
-capabilities
-character
-potential
and also
-normal turnover,
-staff movements planned
-retirements
-succession planning
etc.
2.Corporate Organization Policy/ Budget Guidelines.
3. Corporate HR objective/ strategy
4. Corporate Sales forecasts [ 3 or 5 or 10 years ]
5. Corporate Product Plans [ 3 or 5 or 10 years ]
6. Corporate Production forecasts. [ 3 or 5 or 10 years ]
BASED ON THE ABOVE , hrm/ department managers DEVELOP A SERIES OF
CRUDE FORECASTS OF STAFF REQUIRED.
Now review the following
1.The impact of technological change on task needs.
2. Variations in the efficiency, productivity, flexibility of labor as a
result of training, work study organizational change, new motivations, etc.
3. Changes in employment practices [ e.g. subcontractors or
outsourcing etc ]
4.Other variations due to new legislations like new health requirements,
safety requirements etc.
5.Changes in government policies like tax/ tariff etc
6. Labor demand and supply .
7. Skills levels availability
What should emerge from this analysis / reviews is a "thought out"
and logical staffing demand schedule for varying dates in the future
which can then be compared with the crude supply schedule.
The comparison will then indicate what steps must be taken to
achieve a balance.
This will involve now
-recruitment / selection plan.
-training plan
-retraining plan
-early retirement plan
-redundancy plan
-changes in workforce utilization plan
-succession plan.
-personnel and career plans
These plans will help to bring supply and demand into equilibrium,
not just as a one-off but as a continual workforce planning
exercise the inputs to which will need constant varying to reflect
the actual as against predicted experience on the supply side
and changes in production actually achieved as against forecast
on the demand side.
=======================================
STEP 5
MANPOWER MAPPING
is the process of identifying the gap between
-WHAT IS THE CURRENT BUSINESS SITUATION/ CURRENT MANPOWER
AND
-WHAT IS THE FUTURE BUSINESS SITUATION / MANPOWER NEEDS
AND
-DEVELOPING A PLAN TO FILL THE GAP WITH
BY INDIVDUAL POSITIONS.
*numbers of additional workers/staff / managers etc
*skills of different levels
*flexibility in job handling
*achieving equal employment opportunities
*experience- lifting the experience levels
*capabilities-- improving capabilities for performance
* increase potential of people
*training
etc etc
==================
From India, Mumbai
DO YOU UNDERSTAND MR. LEO LINGHAM AND MR.AZURE WHAT THIS POST IS ALL ABOUT...:idea:
HE DESCRIBED THE PROCEUDRE FOR HUMAN RESOURCE AUDIT......
AND PASTED UNDER THE TITLE OF " STOCK TAKING AND MANPOWER MAPPING" VERY CLAVERLY,
IN THIS WAY YOU ARE GOING TO BE FIRED IF I WOULD HAVE BEEN IN PLACE OF YOUR VICE PRESIDENT AND ASK YOU TO GIVE ME A POWER POINT PRESENTATION AND ESTABLISH THIS METHODOLOGY AS:
"STOCK TAKING AND MANPOWER MAPPING PROCESS"
THIS IS HOW MOST OF THE MEMBERS CONFUSED THE SUBJECTS HERE AND MISINFORM EVERY ONE.
BADLU
From Saudi Arabia
HE DESCRIBED THE PROCEUDRE FOR HUMAN RESOURCE AUDIT......
AND PASTED UNDER THE TITLE OF " STOCK TAKING AND MANPOWER MAPPING" VERY CLAVERLY,
IN THIS WAY YOU ARE GOING TO BE FIRED IF I WOULD HAVE BEEN IN PLACE OF YOUR VICE PRESIDENT AND ASK YOU TO GIVE ME A POWER POINT PRESENTATION AND ESTABLISH THIS METHODOLOGY AS:
"STOCK TAKING AND MANPOWER MAPPING PROCESS"
THIS IS HOW MOST OF THE MEMBERS CONFUSED THE SUBJECTS HERE AND MISINFORM EVERY ONE.
BADLU
From Saudi Arabia
Stock taking and Manpower Mapping
I understand what you Boss wants from this glossary of “stock taking and manpower mapping”
Such glossary is used either by some top management person with technical or some hybrid qualification background that obviously not belongs to Human Resources. These words are very generic words and have no definitions in the books of Human Resources Management
You can use many methodologies; you may also engage some world class consulting companies in the business such as:
1. Deloitte
2. Price Waterhouse Coopers
3. Mckinsey & Co.
4. Arthur D Little
5. Boston Consulting
6. Booz, Allen, Hamilton
7. Ernst & young
8. etc
These consulting companies charge in US$ price for project ranging from 400,000 to 14,00,000 UD$.
Hence, Indian companies cannot afford such price for world class knows-how. Therefore we have to depend on shortcut methods tailored made to apply on Indian business models. I work on technical evaluation of several projects assigned to these consulting companies mentioned above hence can easily differentiate what matter for Indians and what is global phenomenon. Except TATA I did not seen any other Indian company approach to them because of its price.
Be simple and short:
1. Prepare Organization Chart
2. Then prepare department wise and section wise as well as unit group wise organization chart with exact location and positions of the job.
3. Take over view of department functions and process cycle.
4. Describe the activities of each position in the chart (Job Description) with reporting and its work load.
5. Work on sample case how departments are being functioned.
- Take account of the skills sets required by the organization for conduct of the business by listing job positions and number of jobs with job roles.
- Works on what amount of activities being engaged by each position.
- Work on volume of the transitions which been conducted in the past to know whether this structure is feasible or not.
- Or is there any surplus manpower exists or redundancies.
- Or whether some positions have no job. Or jobs which can be outsourced.
6. Once you are sure of your analysis through job audit report and identified the surplus jobs then restructure of department by redesigning the process to identify more efficient and thin model to reduce the size of the department.
7. Then prepare one power point presentation describing new model and weakness of old model where you find surplus or shortages or lack of competencies.
This is only approach and broader guidelines to design action plan how you are going to conduct this management jargon of so called “stock taking and manpower mapping”
.
BADLU
From Saudi Arabia
I understand what you Boss wants from this glossary of “stock taking and manpower mapping”
Such glossary is used either by some top management person with technical or some hybrid qualification background that obviously not belongs to Human Resources. These words are very generic words and have no definitions in the books of Human Resources Management
You can use many methodologies; you may also engage some world class consulting companies in the business such as:
1. Deloitte
2. Price Waterhouse Coopers
3. Mckinsey & Co.
4. Arthur D Little
5. Boston Consulting
6. Booz, Allen, Hamilton
7. Ernst & young
8. etc
These consulting companies charge in US$ price for project ranging from 400,000 to 14,00,000 UD$.
Hence, Indian companies cannot afford such price for world class knows-how. Therefore we have to depend on shortcut methods tailored made to apply on Indian business models. I work on technical evaluation of several projects assigned to these consulting companies mentioned above hence can easily differentiate what matter for Indians and what is global phenomenon. Except TATA I did not seen any other Indian company approach to them because of its price.
Be simple and short:
1. Prepare Organization Chart
2. Then prepare department wise and section wise as well as unit group wise organization chart with exact location and positions of the job.
3. Take over view of department functions and process cycle.
4. Describe the activities of each position in the chart (Job Description) with reporting and its work load.
5. Work on sample case how departments are being functioned.
- Take account of the skills sets required by the organization for conduct of the business by listing job positions and number of jobs with job roles.
- Works on what amount of activities being engaged by each position.
- Work on volume of the transitions which been conducted in the past to know whether this structure is feasible or not.
- Or is there any surplus manpower exists or redundancies.
- Or whether some positions have no job. Or jobs which can be outsourced.
6. Once you are sure of your analysis through job audit report and identified the surplus jobs then restructure of department by redesigning the process to identify more efficient and thin model to reduce the size of the department.
7. Then prepare one power point presentation describing new model and weakness of old model where you find surplus or shortages or lack of competencies.
This is only approach and broader guidelines to design action plan how you are going to conduct this management jargon of so called “stock taking and manpower mapping”
.
BADLU
From Saudi Arabia
Try and contain your disdain and wrath......I would also suggest you use spell check prior to sending any email PVQ
From United Arab Emirates, Dubai
From United Arab Emirates, Dubai
I am not english teacher. This is internet service no one has time to waste on this minor errors..spelling check and grammer check....bla bla.
AFTER ALL WHAT MATTERS IS SUBSTANCE
AND NOT PRESENTATIONS FORMAT....
Badlu
From Saudi Arabia
AFTER ALL WHAT MATTERS IS SUBSTANCE
AND NOT PRESENTATIONS FORMAT....
Badlu
From Saudi Arabia
Guys,
Let's ignore such users who are unfortunately become members (fortunate for them, unfortunate for us). Such people are majority of those who are actually frustrated; (maybe because they did'nt get a satisfactory HR job, or because they are constantly being screwed in their workplace due to their poor parochial attitude, incompetency etc. or because they are simply born with this priceless attitude of finding faults with others.) They are the typical showoffs who don't possess much matter, but like to pretend as if he is God's gift to mankind.
So folks, let's pity for such people because sympathy is the only thing which you can share with them.
Thanks
Prashant
From India, Bangalore
Let's ignore such users who are unfortunately become members (fortunate for them, unfortunate for us). Such people are majority of those who are actually frustrated; (maybe because they did'nt get a satisfactory HR job, or because they are constantly being screwed in their workplace due to their poor parochial attitude, incompetency etc. or because they are simply born with this priceless attitude of finding faults with others.) They are the typical showoffs who don't possess much matter, but like to pretend as if he is God's gift to mankind.
So folks, let's pity for such people because sympathy is the only thing which you can share with them.
Thanks
Prashant
From India, Bangalore
Hi,
Find the below information of Stock Option. Maybe use ful.
1. What is the ESOS ?
A compensation package for the key employees of a company should be designed to attract, motivate, and retain the people who can help the business succeed. Deferred compensation can be used as a technique of encouraging the top employees to remain with the company by combining a delayed vesting arrangement with a deferred compensation plan. An organization committed to being a high-performing organization, aims at encouraging every individual to raise his/her level of performance so as to ensure that the individual efforts combine to maximize both corporate performance and shareholder value. Universally, these objectives are aimed to be achieved through the use of a very potent instrument, namely the Equity Stock Option Scheme (ESOS).
Employees' stock options are one of the most exciting and innovative ways, developed in the post-liberalization period, by which a company can design a compensation package that helps it to achieve these goals at the lowest possible cost. Establishing a successful share scheme and tailoring it to a particular company's needs is a challenge. Under a well-designed scheme, there can be major benefits for both the company and its employees.
2. What is the purpose of the ESOS ?
The purpose of Employee Stock Options Scheme (ESOS) is to advance the interests of the company and its shareholders by offering to those employees of the company who will be responsible for the long-term growth of the company’s earnings the opportunity to acquire or increase their equity interests in the company, thereby achieving a greater commonality of interest between shareholders and employees, enhancing the Company’s ability to retain and attract highly qualified employees and providing an additional incentive to such employees to achieve the Company’s long-term business plans and objectives.
3. What are the benefits of ESOS ?
The benefits of ESOS/ESPS to employees are that they are given a chance to become the shareholders of the company at a discounted price to the market price. Thus the employees are given a chance to share the profits of the company by making them shareholders.
4. How will the scheme be exercised ?
The company will constitute a Compensation Committee for administration and superintendence of the ESOS. It will be a Committee of the Board of Directors consisting of a majority of independent directors. The Committee shall formulate the terms and conditions of the ESOS like
• The quantum of option to be granted per employee and in aggregate.
• The conditions under which the option vested in employee may lapse
• In case of termination of employment for misconduct
• The time period within which the option is to be exercised in case of termination or resignation of an employee
• The right of an employee to exercise the options
• The procedure for making a fair and reasonable adjustment to number of options and to the exercise in case of rights issues bonus issues and other actions
• The grant, vest and exercise of options in case of employees who are on long leave
• The procedure for cashless exercise of options
No Scheme will be offered unless the shareholders of the company approve it by passing a special resolution in the general meeting.
5. Requirement of Separate resolution ?
It will be required in case of
Grant of option to employees of subsidiary or holding company and,
Grant of option to identified employees, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant of option.
6. Can there be any variation in terms of ESOS ?
• The company shall not vary the terms of ESOS in any manner that may be detrimental to he interests of the employees.
• The company may by special resolution in a general meeting vary the terms of ESOS offered pursuant to an earlier resolution of a general body but not yet exercised by the employee provided such variation is not prejudicial to the interests of the option holders. These shall apply to such variations of terms as they do to the original grant of option.
• The notice for passing special resolution for variation of terms of ESOS shall disclose full details of the variation, the rationale therefore, and the details of the employees who are beneficiary of such variation.
7. What will be the effect of the scheme on the rights of the employee ?
The employee shall not have right to receive any dividend or to vote or in any manner enjoy the benefits of a shareholder in respect of option granted to him, till shares are issued on exercise of option.
8. Other Legal Aspects ?
The Board of Directors shall at each annual general meeting before the shareholders a certificate from the auditors of the company that the scheme has been implemented in accordance with the SEBI guidelines and in accordance with the resolution of the company in the general meeting.
9. Will there be any lock-in-period for the transfer of shares ?
There shall be a minimum period of one year between the grant of options and vesting of option. The company shall have the freedom to specify the lock – in period for the shares issued pursuant to exercise of option.
10. Who is eligible ?
It will be applicable to all class of employees whether working in India or abroad at the discretion of the Compensation Committee. However the following classes of employees are not eligible
• A employee who is a promoter or belongs to the promoter group
• A director who either by himself or through his relative or through any body corporate, directly or indirectly holds more than 10% of the outstanding equity shares of the company.
11. Employee Stock Options through Trusts ?
Employee Stock Options are also implemented through creation of Trusts. Trusts are formed under the Indian Trust Act and registered under the relevant Trust Act of the state in which the Trust's activities are to be based. The objectives of the Trust are to administer the Scheme for the employees of a certain organization. The Company issues a certain number of shares at par to the Trust. The Trust then issues these shares to the Company employees in accordance with pre-set guidelines. Under such an arrangement, the employees receive shares from the Trust. The Trust can also buy back the shares from employees in circumstances, which may be specified in the Trust Deed. This arrangement imparts liquidity in the scheme and is suited to companies whose shares are not listed.
12. What will be the Tax – Implications of the scheme ?
The employees are liable for Capital Gains tax at the time of sale of the shares. The taxable amount being Full value of Consideration as reduced by the Indexed Cost of Acquisition. The cost of acquisition being the amount paid for purchase of shares.
13. Effect in case of certain situations ?
a. In case of Death of Employee while in employment - all the options granted to him till such date shall vest in the legal heirs or nominees of the deceased employee.
b. In case the employee suffers a permanent incapacity while in employment -all the options granted to him as on the date of permanent incapacitation shall vest in him on that day.
c. In the event of resignation or termination of the employee - all options not vested as on that day shall expire. However, the employee shall, be entitled to retain all the vested options. Option once granted to any employee shall not transferable to any person and also it cannot be pledged, hypothecated, mortgaged or otherwise alienated in any other manner
14. Options outstanding at Public issue ?
i. The provisions of the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines prohibiting initial public offering by companies having outstanding warrants and financial instruments shall not be applicable in case of outstanding option granted to employees in pursuance of ESOS.
ii. If any option is outstanding at the time of an initial public offering by a company, the promoters' contribution shall be calculated with reference to the enlarged capital that would arise on exercise of all vested options.
iii. If any options granted to employees in pursuance of ESOS are outstanding at the time of initial public offering, the offer document of the company shall disclose all the information required in the Director's Report.
15. Accounting Policies ?
• The options granted to the employee will be treated as employee compensation in the financial statements of the company
• The accounting value of options shall be equal to the aggregate, over all employee stock options granted during the accounting period, of the fair value of the option.
For this purpose:
1. Fair value means the option discount, or, if the company so chooses, the value of the option using the Black Scholes formula or other similar valuation method.
2. Option discount means the excess of the market price of the share at the date of grant of the option under ESOS over the exercise price of the option (including up-front payment, if any)
• Where the accounting value is accounted for as employee compensation the amount shall be amortised on a straight-line basis over the vesting period.
• When an unvested option lapses by virtue of the employee not conforming to the vesting conditions after the accounting value of the option has already been accounted for as employee compensation, this accounting treatment shall be reversed by a credit to employee compensation expense equal to the amortized portion of the accounting value of the lapsed options and a credit to deferred employee compensation expense equal to the unamortized portion.
• When a vested option lapses on expiry of the exercise period, after the fair value of the option has already been accounted for as employee compensation, this accounting treatment shall be reversed by a credit to employee compensation expense.
________________________________________
A FEW SPECIMEN SCHEMES
1. Employee Retention Scheme: The idea of this type of scheme is that employees who are consistent performers are retained and available to the Company. The employees who are consistently performing in their relevant fields shall be eligible for incentives under this type of scheme. The incentives shall be over and above their salaries. The incentives can be provided at the end of each year.
The employees can be rewarded as under: -
On completion of year-1 an eligible employee shall receive X no of shares
On completion of year-2 an eligible employee shall receive 2X no of shares
On completion of year-3 an eligible employee shall receive 3X no of shares, and so on
The benefit of the above shall be that the longer the employee continues to benefit the Company the more he shall be rewarded
2. Achievement Incentive Scheme: The objective of this type of scheme is to reward significant achievements and also to encourage the employees of the Company to make achievements with a view to earn rewards and perform better for their own as well as for the Company
3. Knowledge Retention Scheme: The Idea of this type of scheme is to benefit those employees who have made a significant contribution to product development (e.g. for employees who have contributed to software development in a software company) and have all the knowledge of the same.
The employees in the above scheme can be rewarded in a manner similar to that of the Employee retention Scheme
4. Employee Performance Incentive Scheme: The idea of the scheme lies in having a performance index for the employees of the Company and than multiplying the same by Annual appreciation on the Company’s Equity share price during the year.
5. Defined Contribution Plan: This type of scheme can be an alternative to pension plan. Under This scheme the employer as well as the employee makes a contribution as a percent of annual salary of the Employees to the scheme. The total amount of contribution is invested in the shares of the Company. The value of pension of employee can be determined by ratio of present value of contribution collected for the employee to present value of total contribution.
6. Profit sharing scheme: Under the scheme the profits of the Company can be shared with the employees in the form of shares where the bonus given to the employees shall take form of shares. The amount of bonus payable shall be fixed as a percentage of Profit after Tax, but the payment for the same shall be made in form of shares of the Company. The amount of Bonus can be utilized to buy shares from the market or otherwise for fresh issue of shares.
7. Variable Earnings Related to Stock Options: Under this scheme the number of shares offered to each employee will be related to his "annual variable pay earnings", basis of which shall includes parameters likes the performance of the company, performance of the strategic business unit, individual's performance. An employee can receive 50% of his variable pay in cash and rest 50% can be offered in the form of shares at a discount. In case the employee leaves the organization he can encash his variable options.
8. Economic Value Added (EVA) based scheme: The EVA criteria is also one of the modes of judging the employee performance and the employees can be rewarded in the form of stock options on the basis of value added to the Company.
________________________________________
PROPOSED EMPLOYEES STOCK OPTION SCHEMES
Objectives:
The Company’s intention in introducing the Employees Stock Option Scheme is to reward those employees who are and who shall be responsible for the long-term growth and profitability of the Company, thereby enabling them to acquire an equity stake in the Company. The purpose of the scheme is also to enable the employees to acquire shares of the Company at a price lower than the market price of shares and at the same time give the employees an opportunity to participate in the profits of the Company.
Also as a result of introduction of such a scheme, the Company shall be in a position to retain the employees as well as attract new talent and professionals. The stock options scheme will be an integral part of the Compensation package of the Company. The Company can also introduce a Performance management System that will enable it to monitor and reward the performing employees.
Levels at which the Employees Stock Option schemes are to be implemented:
All the employees falling within grade 1 to 4 shall be eligible to participate in the scheme i.e.
1. Whole-Time directors
2. Presidents
3. Sr. Vice-Presidents
4. Vice-Presidents
5. Assistant Vice-Presidents
6. Chief Managers
7. Sr. Managers
8. Deputy Managers
9. Sr. Analysts
10. Analysts
All the above-mentioned categories of employees shall be eligible to participate in the proposed Employees Stock option Schemes. The number of options to which an employee shall be entitled shall depend upon various factors and shall also be linked to employees’ performance levels. The Compensation Committee that shall consist of majority of independent directors shall be the deciding authority and shall recommend the employees who shall be eligible for such options. The scheme shall be implemented over a period of 5 years. The Compensation committee shall review the performance of the employees every year and accordingly on that basis the employees shall be rewarded.
The performance of the Employees shall be considered on the following Basis:
1. QUALITATIVE FACTORS:
1. Knowledge
2. Skills
3. Initiative taken
4. Educational background
5. Teamwork and Cooperation
6. Hard work
7. Integrity
8. Sincerity
9. Discipline
10. Vision
11. Personality
12. Commitment
13. Responsibilities undertaken
14. Confidence Leve
15. Implementation ability
16. Length of service
17. Potential of the employee
18. Special Achievements
19. Research Abilities
20. Networking abilities
21. Management Abilities
22. Presentation and Communication Abilities
An employee may be rated from grade-A to grade-E on each of the above attributes.
2. QUANTITATIVE FACTORS
i) Profitability of the Company:
• Return on Networth
• Net Profit amount and growth
• Growth in total revenues
• Earning per share (EPS)
• Ratio of profit to total revenues
• Cost savings
ii) Profitability of the Strategic Business Units (Departments)
• Unit wise performance
• Return on Networth of the unit
• Net Profit amount and growth of the unit
• Growth in total revenues of the unit
• Ratio of profit to total revenues in the unit
• Cost savings within the unit
iii) Economic Value Added basis (EVA)
iv) Market Value added (MVA)
v) New Business/ clients introduces, New regions introduced
The above are a few factors that shall be considered by the Compensation committee. The committee shall further exercise its discretion in performance evaluation of the employees. The Committee shall also layout detailed rules for measurement of the above factors for information of all employees.
Details of the Schemes:
The Company proposes to introduce the following schemes:
1. Employees’ retention Scheme.
2. Achievement Incentive Scheme.
3. Performance Incentive Scheme.
The Company proposes to issue 5,00,000 to 7,00,000 equity shares of Rs.10/- over this period of 5 years, which shall be around 5% to 7% of the post public Issue paid-up capital of Rs. 10 crores of the Company.
The Detailed schemes are as under: -
1. Employees Retention Scheme: The scheme is introduced in order to benefit the employees of ________________ Limited, who are consistent achievers and which shall enable them to have a long career with the Company. Also the intention in introduction of the scheme is to reward the employees and to retain them and make their services available to the Company on a long-term basis. Under this scheme the Company plans to issue its equity shares to the various grades of employees. The Employees shall be granted options over a period of 5 years. The number of options granted each year would go on increasing. The date of commencement of the scheme shall be relevant date for the employees already within the organisation and the date of joining shall be the relevant date for new Employees.
The proposed scheme for granting of Stock options to the employees of various grades is as under: -
GRADE MAXIMUM NO.OF SHARES
1. YEAR 1 – 2000
YEAR 2 – 3000
YEAR 3 – 4000
YEAR 4 – 5000
YEAR 5 – 6000
Thus any employee of grade 1 will be eligible to get a maximum of 20,000 shares of the Company over a period of 5 years.
GRADE MAXIMUM NO.OF SHARES
2. YEAR 1 – 1500
YEAR 2 – 2250
YEAR 3 – 2500
YEAR 4 – 3750
YEAR 5 – 5000
An employee of grade 2 can get a maximum of 15,000 shares of the Company over a period of 5 years.
GRADE MAXIMUM NO.OF SHARES
3. YEAR 1 – 1000
YEAR 2 – 1500
YEAR 3 – 2000
YEAR 4 – 2500
YEAR 5 – 3000
An employee of grade 3 can get a maximum of 10,000 shares of the Company over a period of 5 years.
GRADE MAXIMUM NO.OF SHARES
4. YEAR 1 – 750
YEAR 2 – 1000
YEAR 3 – 1350
YEAR 4 – 1850
YEAR 5 – 2550
All grade 4 employees shall be eligible for a maximum of 7500 shares over a period of 5 years.
The Stock options granted shall vest in the employee after the decision made by the Compensation Committee, i.e. after the appraisal by the Compensation Committee. The employee shall have a right to exercise the options vested in them after a period of one year from the date of grant of options. Thereafter every year the Committee shall review the performance and the options shall be granted accordingly. The Compensation Committee shall decide in advance the time of employee appraisal.
The options can be exercised within a period of 2 years from the date of vesting of the options. On expiry of exercise period options not exercised shall lapse. The shares issued to the employee under the above scheme shall have a lock-in period of atleast 1 year from the date of allotment of the shares.
In case an employee gets promoted to any other level or there is a change in his grade he shall be compensated accordingly. E.g. if a grade 4 employee gets promoted to grade 3 during the third year of the scheme than he shall be entitled to 2000 shares instead of 1350 for which he was entitled to before being promoted to grade 3.
Also once the scheme has been approved and is under implementation there cannot be variation in terms of the scheme, if it detrimental to the interests of the employees. However the company will have a right to bring about variation in terms of the scheme in interests of the employees.
In case of death of the employees the options granted to him shall vest in the legal heirs or nominees of the Employee. Similarly in case of permanent disablement of the employee while in employment, all the options granted to him till that date would vest in him.
The shares, which shall be granted to the employees, shall be chargeable to Capital gains Tax at the time of sale of the shares by the employee. The taxable amount being the full value of consideration as reduced by the indexed cost of acquisition of the shares.
If the services of any employee are terminated or the employee resigns, the options, which are not granted, shall lapse. However, all the options that are vested in him before the termination or resignation can be exercised.
The price at which the equity shares will be offered to employees will be decided by the compensation committee from time to time.
2. Achievement Incentive Scheme: The intention behind such a scheme is to reward the special achievements of the employees. The incentive is introduced to reward the special achievements as well as to encourage employees to make achievements with a view to earning rewards and perform better.
The Compensation committee shall consider the various achievements of the employees over a period of one year and on the basis of those achievements the employees shall be rewarded. The Compensation Committee can also review the achievements at the end of each month or other such period and if any major achievement is identified the employee shall be eligible to participate under this scheme. The number of options to be granted shall also be determined by the Compensating Committee.
The Company proposes to set aside 5,000 to 10,000 shares every year for this purpose. Also the Company can issue the number of shares worth Rs. X as a reward under this scheme.
3. Performance Incentive Scheme: This scheme shall be based upon the performance of the Company’s share price on the stock Exchange. The stock market price and market capitalization of the Company is a real measure of the Company’s performance. This scheme shall enable the Company to reward its employees on the basis of the share price performance.
Under this scheme the employees of all the 4 grades shall be allotted a fixed number to be called Share Performance Index Number (SPIN). The Spin shall be as under
GRADE SPIN
1 400
2 300
3 200
4 100
The incentive to be granted shall be obtained by multiplying the SPIN with the annual appreciation on company’s equity share price during the year. Annual Accretion can be arrived at after subtracting the Average market price from the base price i.e. the price at which the shares are to be allotted to the employees. Such accretion shall be utilized to issue the Company’s equity shares to the employees at the base price. The number of shares to be issued can be arrived at by dividing the incentive arrived at above by the base price. The number of shares to be issued shall be rounded off to the nearest 100.
In case of movement of employees from one grade to another he shall be compensated accordingly.
Regards,
Gowri Prasad.K
From India, Hyderabad
Find the below information of Stock Option. Maybe use ful.
1. What is the ESOS ?
A compensation package for the key employees of a company should be designed to attract, motivate, and retain the people who can help the business succeed. Deferred compensation can be used as a technique of encouraging the top employees to remain with the company by combining a delayed vesting arrangement with a deferred compensation plan. An organization committed to being a high-performing organization, aims at encouraging every individual to raise his/her level of performance so as to ensure that the individual efforts combine to maximize both corporate performance and shareholder value. Universally, these objectives are aimed to be achieved through the use of a very potent instrument, namely the Equity Stock Option Scheme (ESOS).
Employees' stock options are one of the most exciting and innovative ways, developed in the post-liberalization period, by which a company can design a compensation package that helps it to achieve these goals at the lowest possible cost. Establishing a successful share scheme and tailoring it to a particular company's needs is a challenge. Under a well-designed scheme, there can be major benefits for both the company and its employees.
2. What is the purpose of the ESOS ?
The purpose of Employee Stock Options Scheme (ESOS) is to advance the interests of the company and its shareholders by offering to those employees of the company who will be responsible for the long-term growth of the company’s earnings the opportunity to acquire or increase their equity interests in the company, thereby achieving a greater commonality of interest between shareholders and employees, enhancing the Company’s ability to retain and attract highly qualified employees and providing an additional incentive to such employees to achieve the Company’s long-term business plans and objectives.
3. What are the benefits of ESOS ?
The benefits of ESOS/ESPS to employees are that they are given a chance to become the shareholders of the company at a discounted price to the market price. Thus the employees are given a chance to share the profits of the company by making them shareholders.
4. How will the scheme be exercised ?
The company will constitute a Compensation Committee for administration and superintendence of the ESOS. It will be a Committee of the Board of Directors consisting of a majority of independent directors. The Committee shall formulate the terms and conditions of the ESOS like
• The quantum of option to be granted per employee and in aggregate.
• The conditions under which the option vested in employee may lapse
• In case of termination of employment for misconduct
• The time period within which the option is to be exercised in case of termination or resignation of an employee
• The right of an employee to exercise the options
• The procedure for making a fair and reasonable adjustment to number of options and to the exercise in case of rights issues bonus issues and other actions
• The grant, vest and exercise of options in case of employees who are on long leave
• The procedure for cashless exercise of options
No Scheme will be offered unless the shareholders of the company approve it by passing a special resolution in the general meeting.
5. Requirement of Separate resolution ?
It will be required in case of
Grant of option to employees of subsidiary or holding company and,
Grant of option to identified employees, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant of option.
6. Can there be any variation in terms of ESOS ?
• The company shall not vary the terms of ESOS in any manner that may be detrimental to he interests of the employees.
• The company may by special resolution in a general meeting vary the terms of ESOS offered pursuant to an earlier resolution of a general body but not yet exercised by the employee provided such variation is not prejudicial to the interests of the option holders. These shall apply to such variations of terms as they do to the original grant of option.
• The notice for passing special resolution for variation of terms of ESOS shall disclose full details of the variation, the rationale therefore, and the details of the employees who are beneficiary of such variation.
7. What will be the effect of the scheme on the rights of the employee ?
The employee shall not have right to receive any dividend or to vote or in any manner enjoy the benefits of a shareholder in respect of option granted to him, till shares are issued on exercise of option.
8. Other Legal Aspects ?
The Board of Directors shall at each annual general meeting before the shareholders a certificate from the auditors of the company that the scheme has been implemented in accordance with the SEBI guidelines and in accordance with the resolution of the company in the general meeting.
9. Will there be any lock-in-period for the transfer of shares ?
There shall be a minimum period of one year between the grant of options and vesting of option. The company shall have the freedom to specify the lock – in period for the shares issued pursuant to exercise of option.
10. Who is eligible ?
It will be applicable to all class of employees whether working in India or abroad at the discretion of the Compensation Committee. However the following classes of employees are not eligible
• A employee who is a promoter or belongs to the promoter group
• A director who either by himself or through his relative or through any body corporate, directly or indirectly holds more than 10% of the outstanding equity shares of the company.
11. Employee Stock Options through Trusts ?
Employee Stock Options are also implemented through creation of Trusts. Trusts are formed under the Indian Trust Act and registered under the relevant Trust Act of the state in which the Trust's activities are to be based. The objectives of the Trust are to administer the Scheme for the employees of a certain organization. The Company issues a certain number of shares at par to the Trust. The Trust then issues these shares to the Company employees in accordance with pre-set guidelines. Under such an arrangement, the employees receive shares from the Trust. The Trust can also buy back the shares from employees in circumstances, which may be specified in the Trust Deed. This arrangement imparts liquidity in the scheme and is suited to companies whose shares are not listed.
12. What will be the Tax – Implications of the scheme ?
The employees are liable for Capital Gains tax at the time of sale of the shares. The taxable amount being Full value of Consideration as reduced by the Indexed Cost of Acquisition. The cost of acquisition being the amount paid for purchase of shares.
13. Effect in case of certain situations ?
a. In case of Death of Employee while in employment - all the options granted to him till such date shall vest in the legal heirs or nominees of the deceased employee.
b. In case the employee suffers a permanent incapacity while in employment -all the options granted to him as on the date of permanent incapacitation shall vest in him on that day.
c. In the event of resignation or termination of the employee - all options not vested as on that day shall expire. However, the employee shall, be entitled to retain all the vested options. Option once granted to any employee shall not transferable to any person and also it cannot be pledged, hypothecated, mortgaged or otherwise alienated in any other manner
14. Options outstanding at Public issue ?
i. The provisions of the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines prohibiting initial public offering by companies having outstanding warrants and financial instruments shall not be applicable in case of outstanding option granted to employees in pursuance of ESOS.
ii. If any option is outstanding at the time of an initial public offering by a company, the promoters' contribution shall be calculated with reference to the enlarged capital that would arise on exercise of all vested options.
iii. If any options granted to employees in pursuance of ESOS are outstanding at the time of initial public offering, the offer document of the company shall disclose all the information required in the Director's Report.
15. Accounting Policies ?
• The options granted to the employee will be treated as employee compensation in the financial statements of the company
• The accounting value of options shall be equal to the aggregate, over all employee stock options granted during the accounting period, of the fair value of the option.
For this purpose:
1. Fair value means the option discount, or, if the company so chooses, the value of the option using the Black Scholes formula or other similar valuation method.
2. Option discount means the excess of the market price of the share at the date of grant of the option under ESOS over the exercise price of the option (including up-front payment, if any)
• Where the accounting value is accounted for as employee compensation the amount shall be amortised on a straight-line basis over the vesting period.
• When an unvested option lapses by virtue of the employee not conforming to the vesting conditions after the accounting value of the option has already been accounted for as employee compensation, this accounting treatment shall be reversed by a credit to employee compensation expense equal to the amortized portion of the accounting value of the lapsed options and a credit to deferred employee compensation expense equal to the unamortized portion.
• When a vested option lapses on expiry of the exercise period, after the fair value of the option has already been accounted for as employee compensation, this accounting treatment shall be reversed by a credit to employee compensation expense.
________________________________________
A FEW SPECIMEN SCHEMES
1. Employee Retention Scheme: The idea of this type of scheme is that employees who are consistent performers are retained and available to the Company. The employees who are consistently performing in their relevant fields shall be eligible for incentives under this type of scheme. The incentives shall be over and above their salaries. The incentives can be provided at the end of each year.
The employees can be rewarded as under: -
On completion of year-1 an eligible employee shall receive X no of shares
On completion of year-2 an eligible employee shall receive 2X no of shares
On completion of year-3 an eligible employee shall receive 3X no of shares, and so on
The benefit of the above shall be that the longer the employee continues to benefit the Company the more he shall be rewarded
2. Achievement Incentive Scheme: The objective of this type of scheme is to reward significant achievements and also to encourage the employees of the Company to make achievements with a view to earn rewards and perform better for their own as well as for the Company
3. Knowledge Retention Scheme: The Idea of this type of scheme is to benefit those employees who have made a significant contribution to product development (e.g. for employees who have contributed to software development in a software company) and have all the knowledge of the same.
The employees in the above scheme can be rewarded in a manner similar to that of the Employee retention Scheme
4. Employee Performance Incentive Scheme: The idea of the scheme lies in having a performance index for the employees of the Company and than multiplying the same by Annual appreciation on the Company’s Equity share price during the year.
5. Defined Contribution Plan: This type of scheme can be an alternative to pension plan. Under This scheme the employer as well as the employee makes a contribution as a percent of annual salary of the Employees to the scheme. The total amount of contribution is invested in the shares of the Company. The value of pension of employee can be determined by ratio of present value of contribution collected for the employee to present value of total contribution.
6. Profit sharing scheme: Under the scheme the profits of the Company can be shared with the employees in the form of shares where the bonus given to the employees shall take form of shares. The amount of bonus payable shall be fixed as a percentage of Profit after Tax, but the payment for the same shall be made in form of shares of the Company. The amount of Bonus can be utilized to buy shares from the market or otherwise for fresh issue of shares.
7. Variable Earnings Related to Stock Options: Under this scheme the number of shares offered to each employee will be related to his "annual variable pay earnings", basis of which shall includes parameters likes the performance of the company, performance of the strategic business unit, individual's performance. An employee can receive 50% of his variable pay in cash and rest 50% can be offered in the form of shares at a discount. In case the employee leaves the organization he can encash his variable options.
8. Economic Value Added (EVA) based scheme: The EVA criteria is also one of the modes of judging the employee performance and the employees can be rewarded in the form of stock options on the basis of value added to the Company.
________________________________________
PROPOSED EMPLOYEES STOCK OPTION SCHEMES
Objectives:
The Company’s intention in introducing the Employees Stock Option Scheme is to reward those employees who are and who shall be responsible for the long-term growth and profitability of the Company, thereby enabling them to acquire an equity stake in the Company. The purpose of the scheme is also to enable the employees to acquire shares of the Company at a price lower than the market price of shares and at the same time give the employees an opportunity to participate in the profits of the Company.
Also as a result of introduction of such a scheme, the Company shall be in a position to retain the employees as well as attract new talent and professionals. The stock options scheme will be an integral part of the Compensation package of the Company. The Company can also introduce a Performance management System that will enable it to monitor and reward the performing employees.
Levels at which the Employees Stock Option schemes are to be implemented:
All the employees falling within grade 1 to 4 shall be eligible to participate in the scheme i.e.
1. Whole-Time directors
2. Presidents
3. Sr. Vice-Presidents
4. Vice-Presidents
5. Assistant Vice-Presidents
6. Chief Managers
7. Sr. Managers
8. Deputy Managers
9. Sr. Analysts
10. Analysts
All the above-mentioned categories of employees shall be eligible to participate in the proposed Employees Stock option Schemes. The number of options to which an employee shall be entitled shall depend upon various factors and shall also be linked to employees’ performance levels. The Compensation Committee that shall consist of majority of independent directors shall be the deciding authority and shall recommend the employees who shall be eligible for such options. The scheme shall be implemented over a period of 5 years. The Compensation committee shall review the performance of the employees every year and accordingly on that basis the employees shall be rewarded.
The performance of the Employees shall be considered on the following Basis:
1. QUALITATIVE FACTORS:
1. Knowledge
2. Skills
3. Initiative taken
4. Educational background
5. Teamwork and Cooperation
6. Hard work
7. Integrity
8. Sincerity
9. Discipline
10. Vision
11. Personality
12. Commitment
13. Responsibilities undertaken
14. Confidence Leve
15. Implementation ability
16. Length of service
17. Potential of the employee
18. Special Achievements
19. Research Abilities
20. Networking abilities
21. Management Abilities
22. Presentation and Communication Abilities
An employee may be rated from grade-A to grade-E on each of the above attributes.
2. QUANTITATIVE FACTORS
i) Profitability of the Company:
• Return on Networth
• Net Profit amount and growth
• Growth in total revenues
• Earning per share (EPS)
• Ratio of profit to total revenues
• Cost savings
ii) Profitability of the Strategic Business Units (Departments)
• Unit wise performance
• Return on Networth of the unit
• Net Profit amount and growth of the unit
• Growth in total revenues of the unit
• Ratio of profit to total revenues in the unit
• Cost savings within the unit
iii) Economic Value Added basis (EVA)
iv) Market Value added (MVA)
v) New Business/ clients introduces, New regions introduced
The above are a few factors that shall be considered by the Compensation committee. The committee shall further exercise its discretion in performance evaluation of the employees. The Committee shall also layout detailed rules for measurement of the above factors for information of all employees.
Details of the Schemes:
The Company proposes to introduce the following schemes:
1. Employees’ retention Scheme.
2. Achievement Incentive Scheme.
3. Performance Incentive Scheme.
The Company proposes to issue 5,00,000 to 7,00,000 equity shares of Rs.10/- over this period of 5 years, which shall be around 5% to 7% of the post public Issue paid-up capital of Rs. 10 crores of the Company.
The Detailed schemes are as under: -
1. Employees Retention Scheme: The scheme is introduced in order to benefit the employees of ________________ Limited, who are consistent achievers and which shall enable them to have a long career with the Company. Also the intention in introduction of the scheme is to reward the employees and to retain them and make their services available to the Company on a long-term basis. Under this scheme the Company plans to issue its equity shares to the various grades of employees. The Employees shall be granted options over a period of 5 years. The number of options granted each year would go on increasing. The date of commencement of the scheme shall be relevant date for the employees already within the organisation and the date of joining shall be the relevant date for new Employees.
The proposed scheme for granting of Stock options to the employees of various grades is as under: -
GRADE MAXIMUM NO.OF SHARES
1. YEAR 1 – 2000
YEAR 2 – 3000
YEAR 3 – 4000
YEAR 4 – 5000
YEAR 5 – 6000
Thus any employee of grade 1 will be eligible to get a maximum of 20,000 shares of the Company over a period of 5 years.
GRADE MAXIMUM NO.OF SHARES
2. YEAR 1 – 1500
YEAR 2 – 2250
YEAR 3 – 2500
YEAR 4 – 3750
YEAR 5 – 5000
An employee of grade 2 can get a maximum of 15,000 shares of the Company over a period of 5 years.
GRADE MAXIMUM NO.OF SHARES
3. YEAR 1 – 1000
YEAR 2 – 1500
YEAR 3 – 2000
YEAR 4 – 2500
YEAR 5 – 3000
An employee of grade 3 can get a maximum of 10,000 shares of the Company over a period of 5 years.
GRADE MAXIMUM NO.OF SHARES
4. YEAR 1 – 750
YEAR 2 – 1000
YEAR 3 – 1350
YEAR 4 – 1850
YEAR 5 – 2550
All grade 4 employees shall be eligible for a maximum of 7500 shares over a period of 5 years.
The Stock options granted shall vest in the employee after the decision made by the Compensation Committee, i.e. after the appraisal by the Compensation Committee. The employee shall have a right to exercise the options vested in them after a period of one year from the date of grant of options. Thereafter every year the Committee shall review the performance and the options shall be granted accordingly. The Compensation Committee shall decide in advance the time of employee appraisal.
The options can be exercised within a period of 2 years from the date of vesting of the options. On expiry of exercise period options not exercised shall lapse. The shares issued to the employee under the above scheme shall have a lock-in period of atleast 1 year from the date of allotment of the shares.
In case an employee gets promoted to any other level or there is a change in his grade he shall be compensated accordingly. E.g. if a grade 4 employee gets promoted to grade 3 during the third year of the scheme than he shall be entitled to 2000 shares instead of 1350 for which he was entitled to before being promoted to grade 3.
Also once the scheme has been approved and is under implementation there cannot be variation in terms of the scheme, if it detrimental to the interests of the employees. However the company will have a right to bring about variation in terms of the scheme in interests of the employees.
In case of death of the employees the options granted to him shall vest in the legal heirs or nominees of the Employee. Similarly in case of permanent disablement of the employee while in employment, all the options granted to him till that date would vest in him.
The shares, which shall be granted to the employees, shall be chargeable to Capital gains Tax at the time of sale of the shares by the employee. The taxable amount being the full value of consideration as reduced by the indexed cost of acquisition of the shares.
If the services of any employee are terminated or the employee resigns, the options, which are not granted, shall lapse. However, all the options that are vested in him before the termination or resignation can be exercised.
The price at which the equity shares will be offered to employees will be decided by the compensation committee from time to time.
2. Achievement Incentive Scheme: The intention behind such a scheme is to reward the special achievements of the employees. The incentive is introduced to reward the special achievements as well as to encourage employees to make achievements with a view to earning rewards and perform better.
The Compensation committee shall consider the various achievements of the employees over a period of one year and on the basis of those achievements the employees shall be rewarded. The Compensation Committee can also review the achievements at the end of each month or other such period and if any major achievement is identified the employee shall be eligible to participate under this scheme. The number of options to be granted shall also be determined by the Compensating Committee.
The Company proposes to set aside 5,000 to 10,000 shares every year for this purpose. Also the Company can issue the number of shares worth Rs. X as a reward under this scheme.
3. Performance Incentive Scheme: This scheme shall be based upon the performance of the Company’s share price on the stock Exchange. The stock market price and market capitalization of the Company is a real measure of the Company’s performance. This scheme shall enable the Company to reward its employees on the basis of the share price performance.
Under this scheme the employees of all the 4 grades shall be allotted a fixed number to be called Share Performance Index Number (SPIN). The Spin shall be as under
GRADE SPIN
1 400
2 300
3 200
4 100
The incentive to be granted shall be obtained by multiplying the SPIN with the annual appreciation on company’s equity share price during the year. Annual Accretion can be arrived at after subtracting the Average market price from the base price i.e. the price at which the shares are to be allotted to the employees. Such accretion shall be utilized to issue the Company’s equity shares to the employees at the base price. The number of shares to be issued can be arrived at by dividing the incentive arrived at above by the base price. The number of shares to be issued shall be rounded off to the nearest 100.
In case of movement of employees from one grade to another he shall be compensated accordingly.
Regards,
Gowri Prasad.K
From India, Hyderabad
But To My Surprise,
I Hardly See Your Comments Of Contribution On This Forum. Specially People Like You Are Afraid Of Their Own Knowledge Base Hide Their True Identity And Sermon Like Clerics.
You Appears With Nick Names Or Token Names That Is Showing Lack Of Confidence In Your Judgements of Knowledge being Shared. Y
You Did Not Have An Argument Here To Question On the Technical Aspect, And Cameoflauge appreaciation to your own responce with fake identity to appreciate your own stand.
Wink Wink....PVQ Baby
Your Friendly Brotherhood,
Badlu
From Saudi Arabia
I Hardly See Your Comments Of Contribution On This Forum. Specially People Like You Are Afraid Of Their Own Knowledge Base Hide Their True Identity And Sermon Like Clerics.
You Appears With Nick Names Or Token Names That Is Showing Lack Of Confidence In Your Judgements of Knowledge being Shared. Y
You Did Not Have An Argument Here To Question On the Technical Aspect, And Cameoflauge appreaciation to your own responce with fake identity to appreciate your own stand.
Wink Wink....PVQ Baby
Your Friendly Brotherhood,
Badlu
From Saudi Arabia
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