When it comes to stock-based incentive programmes, most of the organisations prefer 'Employee Stock Option Plans' (ESOPs), as per the findings of a survey by consultancy EY.
The 'Stock Based Incentive Survey' showed that as much as 71 per cent companies have adopted stock-based incentive plans as a tool to retain and attract talent as well as create wealth for the employees.
Of these, 57 per cent employers used ESOPs while 17 per cent used a mix of all stock-based plans for employees.
The survey found that 16 per cent of the employers offered stock-based incentives to their employees with objective of retaining them, 9 per cent with an aim to attract talent, while 7 per cent did so to create wealth for the employees.
Among the Indian companies surveyed, as many as 88 per cent preferred ESOPs as the scheme is easier to understand and and helped in retention. As much as 49 per cent of the multinational firms favoured the plan.
However, a majority of the firms were found to be offering the stock-based incentives plans to only a selective number of employees.
Industry-wise, the stock-based incentive plans were more likely to be rolled out by technology, telecom and media companies (37 per cent) followed by manufacturing and consumer goods (20 per cent), healthcare and life sciences (14 per cnet) and financial services (11 per cent).
"...a common theme of hiring and retention of critical talent has ensured that successful and growing organisations across all sectors consider a compensation strategy married to stock-based incentive plans," EY Partner and National Leader – Human Capital Services Sonu Iyer said.
Meanwhile, the findings also suggested that MNCs had allotted higher capital towards stock-based incentive plans compared to the Indian companies.
While most of the Indian companies have committed up to 3 per cent of their paid up share capital toward stock-based incentive plans, a majority of the MNCs were found to have set aside 5-10 per cent of the share capital for such schemes.
The survey was conducted online and through personal interviews between December 2013 and January 2014.