HCL Tech to include Restricted Stock Units in compensation mix to retain high performers
This will cover close to 3,000 senior executives. Under this model, which was approved by the board on October 14, the company will move from 100 percent cash awards to a mix of 70 percent cash and 30 percent RSUs for the grants. This is subjected to board approval.
October 15, 2021 / 08:13 AM IST
The office of HCL Technologies Ltd at Noida.
Noida-based IT services firm HCL Technologies announced that its existing long-term incentive (LTI) programme will include Restricted Stock Unit (RSU) grants as part of the compensation mix, as it looks to retain high performers amid war for talent.
Under this model, which was approved by the Board on October 14, the company will move from 100 percent cash awards to a mix of 70 percent cash and 30 percent RSUs for the grants, which will be offered in the later year subject to shareholder approval.
The plan proposes to allocate 11.1 million shares (equal to less than 0.5 percent of the company’s equity shares) to almost 3,000 senior leaders, the company said in a statement. Earlier, 1,000 senior executives were covered under the plan.
The plans will be offered as tenure-based vesting by FY25, and the company also has proposed an option to substitute this part of the plan with RSUs that vest based on achievement of long-term performance targets, the statement added. The structure of the programme will ensure there is no equity dilution for existing shareholders of the company. The total plan investment will not be impacted by the move from all cash to cash plus RSUs.
“We continue to see strong growth momentum in the business, and we are happy to extend long term wealth creation opportunities in the form of RSUs for a greater number of senior leaders,” said C Vijayakumar, HCL Technologies CEO and Managing Director.
VV Apparao, chief human resources office, said that this move is an attempt to be competitive when it comes to attracting and retaining talent. “We need to benchmark ourselves against the competition to be competitive in the market in order to retain high performers,” he said. According to him, the company made this proposal in a bid to retain the senior executives in the company and was approved.
The company saw its attrition increase from 11.8 percent last quarter to 15.7 percent for the quarter ending September 2021. The company reported $2,791 million in revenues for Q2 FY22, up 2.6 percent sequentially and 11.3 percent year-on-year.