Top executives in 40 leading companies have received Rs 12,000 crore (Rs 120 billion) worth of equity shares under employee stock options till March 2006.
Data culled from annual reports and employee stock options announcements made to the stock exchanges show 143 million shares valued at Rs 11,000 crore (Rs 10 billion) are outstanding with these companies to be offered as stock options in the coming years.
Stock options availed of by executives of these companies in the last four years are now valued at over Rs 10,000 crore (Rs 100 billion).
Infosys Technologies, which proposed sweat equity in 1998 and 1999, has issued options worth Rs 5,000 crore (Rs 50 billion). Wipro, ICICI Bank, HDFC and Larsen & Toubro have issued stock options valued at over Rs 1,000 crore (Rs 10 billion) each.
Sweat equity is given to executives as a tool to retain talent. They are offered at a fixed price and the difference between the offer price and the market price is paid by the employees.
Seven companies - Infosys, Wipro, Satyam Computers, HDFC Bank, ICICI Bank, Larsen & Toubro and HDFC - have outstanding shares worth Rs 10,000 crore to be issued under sweat equity.
Hindustan Lever, ACC, Gujarat Ambuja Cement and Ranbaxy Laboratories have outstanding shares worth Rs 250 crore (Rs 2.5 billion) each while Suzlon and Crisil have offers worth Rs 150 crore (Rs 1.5 billion) each under sweat equity schemes.
Dr Reddy's Labs, Geodesic Information, GTL, Ashapura Minechem, Financial Technologies, Lupin, Max India, Gateway Distriparks and many others have kept aside shares to be offered under sweat equity.
Announcements made by employees under Sebi's disclosure norms show that 188 employees of 30-odd firms currently hold shares valued at more than Rs 1 crore (RS 10 million) each.
R Ravisankar, CEO, international division of i-flex, sold 187,000 shares valued at Rs 38 crore (Rs 380 million) recently and currently holds 441,000 shares valued at Rs 90 crore (Rs 900 million).
Deepak Ghaisas, CEO of i-flex, bought 370,000 equity shares valued at Rs 74.80 crore (Rs 748 million) under sweat equity in December 2006. AM Naik, chairman of Larsen & Toubro, holds 480,000 shares granted under sweat equity valued at Rs 71 crore (Rs 710 million).
Keki Mistry and Renu S Karnad of HDFC, Anil Singhvi of Gujarat Ambuja Cement, BS Nagesh of Shopper's Stop, YC Deveshwar of ITC, PD Narang of Dabur, KV Kamath and Lalita Gupte of ICICI Bank and Dipak Gupta and Shivaji Dam of Kotak Mahindra Bank are among the few holding shares worth over Rs 10 crore (Rs 100 million) granted under sweat equity.
Sweat equity
- Executives in 40 leading companies have received equity shares under employee stock options till March 2006
- 143 million shares valued at Rs 11,000 crore are outstanding with these companies to be offered as stock options in the coming years
- Infosys Technologies, which proposed sweat equity in 1998 and 1999, has issued options worth Rs 5,000 crore
- Wipro, ICICI Bank, HDFC and Larsen & Toubro have issued stock options valued at over Rs 1,000 crore each
