Windfall awaits GSPL employees encashing Esop
The first equity stock option plan (Esop) offered by a state public sector unit, Gujarat State Petronet (GSPL) will come up for vesting this month.
By Narayan Bhatt, TNN |
AHMEDABAD: The first equity stock option plan (Esop) offered by a state public sector unit, Gujarat State Petronet (GSPL) will come up for vesting this month.
It may also be the first such scheme amongst central and state oil & gas PSUs in the country. With the current price of GSPL at Rs 38 per share as against the Rs 14 offered as per the Esop scheme, those employees who have opted for this plan are set to make windfall profits.
Out of the 8.08m shares reserved for the Esop scheme, 2.33m shares were allotted to the employees of GSPL as well as to employees of its parent company, Gujarat State Petroleum Corporation.
“This is the first Esop scheme offered by a PSU in the state. We have introduced this product as we need to retain good quality personnel who are difficult to come by in the oil and gas industry these days,” says DJ Pandian, managing director of GSPL.
All employees on the payroll, including clerical and other lower-end staff, are eligible for the company’s Esop scheme.
The Esop scheme which was launched on October 18, ‘05, will be available for vesting one year later that is with effect from October 19, ‘06.
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Employees who have opted for the scheme will get 60% of their entitled shares on completion of one year and have the option of thereafter selling these shares in the capital markets at the prevailing prices. Out of the 2.33 million shares allotted under Esop, 1.15 million will come up for vesting from October 19, ‘06.
GSPL’s closing price on September 30, ‘06 stood at Rs 38. As against the Rs 14 per share price under Esop, employees stand to make a windfall profit of around 170% in one year’s time. GSPL’s initial public issue took place in January ‘06.
In an interesting development, even the five IAS officers, who are on the company’s board of directors have also been offered an aggregate of 1.26 lakh shares under this Esop scheme.
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