Hcl To Offer 75% Staff Equity Option

The country's largest infotech conglomerate, the over Rs 1800-crore HCL group, is planning to cover nearly 75 per cent of its staff under the employees stock option scheme (ESOP) within the next few years. At present, some of the workers already enjoy the benefit of ESOP.

In each group company, ESOP is likely to cover around five per cent of the equity and employees are expected to be offered a basket comprising shares of other group companies.

However, no final decision has been taken on the issue yet. The exact modalities of the programme as well its legal aspects are being examined. A final decision will evolve over the next few months, after taking into account the various changes that are being incorporated in the companies bill and corporate law, sources in the group pointed out.

 

In the IT sector, Bangalore-based Infosys Technologies was one of the first companies to offer stock option to its employees, a practice that is fairly common in developed countries.

However, to offer stocks to the employees of publicly-held HCL-HP, NIIT, HCL-Office Automation and Network, which are group companies of HCL, either their equity base could be expanded or their directors and promoters could relinquish a part of their shares.

The rest of the group companies are privately-held.

Under the present law, employees can be offered shares only at the prevailing market price of the scrip.

Within the HCL fold, each business moves independently and the rate of growth of each is different depending on the nature of business the particular company undertakes.

Moreover in infotech sector each business passes through a technology cycle, with some businesses showing higher growth in some years than others. Therefore, the general opinion among the senior members in the HCL group is veering around a basket comprising shares of some of the group companies that would represent a wholesome mix. At present the HCL group through its various group companies employ around 7,000 persons.

Thus even at the present level of employment around 5,250 people will be covered under ESOP within the next few years.

In HCL-HP alone, the total number of employees total more than 2000.

In some cases employees may be offered a combination of shares of different group companies.

In August 1986, HCL had offered the ESOP for the first time. At that time the directors and promoters had relinquished part of their holding in the company.