The wealth of senior managers in corporate India may see a huge decline as a plunge in markets has hit the value of their employee stock options (ESOPs), according to a report by Mint.
Indian benchmark indices hit a record intraday loss in March as panic selling began due to fears of the economic impact of the coronavirus outbreak.
Several senior executives have sold their shares at low prices to clear the loans taken to exercise their ESOPs, the report said.Moneycontrol could not independently verify the story.
IDFC First Bank CEO V Vaidyanathan sold shares worth Rs 93 crore earlier in March, Mint reported.
Shyam Srinivasan, the chief executive of Federal Bank, sold shares worth Rs 43 crore, the report added.
“At senior levels, where the quantum of ESOPs is fairly high, people generally have to avail these loans as they may not have ready cash available," said Srikanth Subramanian, the senior executive director at Kotak Wealth Management, told the publication.The impact will be greater in case the company's stocks are comparatively more illiquid. “In such cases, selling of a large quantum of shares by an employee can result in a further downward spiral in the stock price," Subramanian added.