The Mahindra Group has announced a one-time employee stock ownership plan grant worth around Rs 500 crore to over 14,000 employees as a Diwali bonus.
The initiative spans three major companies of the diversified conglomerate: Mahindra & Mahindra (auto and farm sectors), Mahindra Electric Automobile and Mahindra Last Mile Mobility. It comes on the back of strong sales and profits, driven by popular models like the Thar, which has helped M&M’s stock surge over 12 times in the last five years, according to an Economic Times report.
According to reports, this marks the first instance in India where a Diwali bonus is being awarded in the form of ESOP, rather than cash. Moreover, this is the first time the Mahindra Group is extending equity ownership to its blue-collar workforce.
The bonus will be issued as Restricted Stock Units. To be eligible, employees must be on the permanent payroll of the company and should have completed a minimum of 12 months of continuous service at the time of the announcement.
The beneficiaries may be liable to pay tax on profits earned from selling their ESOP shares, depending on their income tax slabs. But shopfloor workers earning below the taxable threshold will not be required to pay any tax on these gains.
Mahindra has surpassed Hyundai to become India’s second-largest passenger vehicle manufacturer, driven by its strong SUV lineup. In an internal note seen by ET, the tractor-to-tech conglomerate said the ESOPs aim to support broad-based wealth creation.
The move follows a precedent set by the JSW Group, which in 2021 introduced a Rs 1,000-crore ESOP programme for its blue-collar workforce.
Could Mahindra’s ESOP initiative set the tone for a broader cultural shift in corporate India? As employees across ranks, from shop floors to boardrooms, become stakeholders in success, the line between employer and partner may be steadily blurring.
. Read more on Markets by NDTV Profit.