Mahindra Group has announced a one-time Employee Stock Ownership Plan (ESOP) grant for 12,000 to 14,000 employees, including shop floor workers for the first time.
The initiative, timed ahead of Diwali, reflects the company’s intent to recognize long-term contributions and foster a sense of ownership among its workforce.
The ESOP grant spans across three core entities: Mahindra & Mahindra (Auto and Farm Sector), Mahindra Electric Automobile, and Mahindra Last Mile Mobility.
The total financial outlay for the program is estimated to be between ₹400 crore and ₹450 crore.
Mahindra Group Extending Ownership Beyond the Executive Suite
Traditionally, ESOPs have been reserved for senior executives and managerial staff.
Mahindra’s decision to include shop floor workers marks a departure from this norm and sets a precedent for broader-based wealth sharing in Indian industry.
Employees who have completed at least one year on the permanent payroll are eligible for the grant. It will be provided in the form of Restricted Stock Units (RSUs).
Group CEO Anish Shah emphasized the symbolic and practical value of the initiative, stating that the ESOPs are meant to make employees “co-owners” of the enterprise rather than just contributors.
In an internal note, Anish wrote, “This special grant reflects the organisation’s appreciation for your efforts, makes you a co-owner of this enterprise, and gives you a share in the value that you have helped co-create”.
Financial Performance and Market Position
The ESOP announcement follows a period of strong financial performance for Mahindra.
Mahindra’s stock has witnessed a twelvefold increase over the past five years. This growth has been fueled by the success of popular models such as the Thar SUV.
Mahindra has also recently overtaken Hyundai to become India’s second-largest passenger vehicle manufacturer, underscoring its growing market influence.
The ESOPs serve as a recognition of employees’ past contributions. They are also designed to align individual goals with the company’s long-term growth strategy.
Internal communications suggest that the initiative will promote broad-based wealth creation.
It also aims to boost employee productivity by helping workers feel more connected to the company.
Tax Benefits and Accessibility
One notable feature of the ESOP plan is its accessibility to lower-income employees.
Employees whose income falls below the taxable threshold are exempt from paying tax. This exemption also applies to any gains they receive from their stock units.
This provision is particularly relevant for shop floor workers, many of whom fall within this bracket.
Industry experts have praised the move for its potential to reshape employee engagement.
Rajiv Agarwal, Chair of Strategy at SPJIMR, noted that the initiative has the potential to improve productivity.
He believes it encourages workers to take a more active role in the company’s growth.
“This approach not only supports the company’s expansion but also allows employees to benefit from the rise in the stock price,” he said.
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