INSUBCONTINENT EXCLUSIVE:
Mumbai: Companies with higher institutional holdings will have a tough time issuing employee stock options (Esop) at par or at huge discount
to current market price as fund managers have started voting against such resolutions as the low exercise price puts a burden on the
managers.
A resolution to issue shares of up to 50 lakh at a nominal value of 5 each under a 2018 Esop for employees and directors at an
exercise price of face value was opposed by 46.17 per cent of institutional shareholders, bulk of them foreign investors
Domestic fund managers blame their foreign counter parts for opposing Esop in many cases on the basis of recommendations of foreign proxy
Balasubramanian, chief executive officer, Birla Mutual Fund
issue 1 crore Esop exercisable into 1 crore equity shares of face value of Rs 10 each
About 66 per cent of the 68 per cent institutional investors who voted opposed the resolution
Nilesh Shah, CEO, Kotak Mutual Fund
Vysya Esop scheme 2018 at a maximum 10 per cent discount to market price was approved by shareholders
was opposed by 37.60 per cent institutional investors in September last year while early this month, the Esop resolution of AU Small Finance
Bank was opposed by more than half the institutional investors
manager, Motilal Oswal Mutual Fund
