Air India has initiated an Employees Share Benefit Scheme, under which permanent employees can purchase equity in the airline. This is not an employee stock option scheme (ESOP), Air India clarified.
All permanent employees of Air India and Air India Express appointed before January 27, 2022, the date of takeover by Tata Sons, will be eligible for the ESB scheme.
“In accordance with the share purchase agreement signed as part of the disinvestment process, Air India has initiated the Employee Share Benefit Scheme for eligible employees who were in service with the airline on the date of privatisation,” said a spokesperson from Air India.
Employees can purchase up to 3% equity or 979 million shares at `0.27 per share. News agency PTI said quoting a source that the price is at a discount compared to the book value of `0.87-0.9 per share at the time of the acquisition.
Employees retiring on or after January 27, 2022 will be deemed eligible for the ESB scheme and shall receive dividend if and when declared. An employee trust has been set up to administer the ESB scheme.
“We will be working with the relevant employees to help them understand the long-term benefits and avail of the same,” the Air India spokesperson added.
“The trust shall hold the ESB shares to provide the benefits to the eligible employees upon the payment of the aggregate exercise price together with all applicable taxes and amounts,” the document said.
Talace, a subsidiary of Tata Sons, acquired Air India, Air India Express and the government’s 50% stake in Air India SATS Airport Services.
Air India Express has around 1,600 employees, the majority of whom are contractual staff. It has about 300 pilots who are on permanent rolls, PTI added quoting a source.