The company, which will seek the approval of the shareholders for granting options upto 5 per cent of its share capital later this month, has decided to grant stock options representing 1.2 per cent of the company's equity capital to eligible employees immediately thereafter.

For options which will be granted on or before September 30, 2000, the exercise price works out to Rs 215.31 per share. On Thursday, the M&M stock closed at Rs 223.95 on the BSE.The company's compensation committee, which comprises mostly independent directors, is currently formulating the terms and conditions of the stock option scheme.

M&M has decided that all "employees" of the company, including the directors, will be eligible for the stock option scheme. "The class of employees eligible for participating in the stock options shall be determined on the basis of the grade, number of years' service, performance, and such other parameters as may be decided by the remuneration/compensation committee, in its sole discretion, from time to time," the company has said.

The maximum number of options granted per employee will not exceed two lakh shares, while the aggregate of all such grants will not exceed 5 per cent of the issued and outstanding equity shares of the company as on March 31, 2000.The scheme will also cover any issuance of ADR/GDR or other securities by the company, as may be permitted from time to time."It has now been accepted internationally that stock options is an effective instrument to align the interests of the employees with those of the company. This also provides an opportunity to employees to participate in the growth of the company, besides creating long term wealth in their hands," M&M has said.

Company to hike salary of top officialsÎIN line with current market trends, M&M has decided to hike the salary of its top officials based on the recommendation of its compensation committee.Managing director Anand Mahindra will draw a revised salary of Rs 1.5 lakh per month in the scale of Rs 1.5 lakh - Rs 3 lakh a month, while executive directors KJ Davasia, Bharat Doshi, Alan E Durante and AK Nanda will draw a salary of Rs 1 lakh per month. The company will seek the shareholders' approval for the revised salary structure for the top officials. In addition to the salary and perquisites, each of the directors will be eligible to such commission based on the net profits of the company in any financial year not exceeding 1 per cent of the such profits as the remuneration/ compensation committee or board will decide, having regard to the company's performance.