L & T Leaves Out Cement Wing Staff From Esop

Larsen & Toubro, despite working out an attractive employee stock options (Esop) scheme for around 800 management executives, has left employees of its cement division in the lurch, at least for the time being. The only exception being the ailing division's president and executive director Mohan Karnani, whose Esop at 42,000 shares is the lowest among all other L&T directors. Senior company officials said that Esops for other employees of the company will be worked out only after the strategic investor, which is being roped in after the division is hived off from L&T, is finalised. "We will have to hold discussions with them on this issue. May be we will have to look at whether shares of the parent company will be issued or that of the new subsidiary," the sources said. L&T plans to hold at least 50 per cent in the company and retain management control. It is also looking at the option of an initial public offering at a later stage. The company has worked out the Esop at a grant price of Rs 184 per share, with managing director and CEO A M Naik getting two lakh shares, while other executive directors have been granted between one lakh to 1.25 lakh shares each. At this stage, however, the L&T stock has lost its sheen having taken a significant beating on the bourses. Analysts attribute the loss-making cement division as a major reason for this stock depreciation.