Yes Bank is mulling to enhance shares offered under the Employee Stock Option Plan (ESOP) to 225 million from current 75 million to incentivise employees and tackle poaching by other private banks. The bank also decided to fix Managing Director and CEO Prashant Kumar's annual remuneration at Rs 2.84 crore, including Rs 45 lakh/per annum basic salary and other allowances worth Rs 1.05 crore, perquisites and retirement benefits, a notice for the virtual annual general meeting (AGM) scheduled for September 10 said.
The remuneration payable to Prashant Kumar as MD & CEO has been approved by the RBI in its communication dated June 24, 2020, in which the bank was told that a separate communication on variable pay would follow, the notice said. Sunil Mehta, who has been appointed as the non-executive director and chairman of the bank, will get remuneration worth Rs 25 lakh per annum, plus other allowances and perquisite.
Regarding the ESOP options, the bank said it has granted options under the said scheme and the balance is nearing exhaustion. "In line with the bank's compensation philosophy, a fresh infusion into the ESOP pool is required for the purpose of hiring and retaining critical talent which needs to be ring-fenced to avoid poaching by competition and other organisations," said the notice.
While the bank is implementing a holistic programme to engage and retain talent, ESOPS will play a key role in the retention strategy of the bank, it said.
Yes Bank said enhancement in the ESOP pool is in no way any guarantee of allotment of ESOP and is merely an enabling provision. "The actual grant of ESOP shall be subject to the performance of the bank, business unit and individual with the approval of N&RC, board and RBI in the case of MD & CEO and executive directors," it said.
Yes Bank said the bank has faced a multitude of challenges in the last few quarters, including the ongoing global COVID-19 impact. "Despite this, the bank has shown resilience and post the reconstruction of the bank, has embarked on a transformation journey, which has been further accelerated by the culmination of the recent FPO...so, it is imperative that the employees continue to remain motivated," the bank said.
An important reason for seeking enhancement in the ESOP is the revised compensation guidelines notified by the RBI. The guidelines stipulate the framework for the compensation structure in respect of MD & CEO and other top managers. They make it mandatory to maintain a certain proportion between fixed and variable pay and further stipulate that at least 50 per cent of the variable pay should be in the form of ESOP.
Yes Bank share is trading 2.09 per cent up at Rs 14.65 today, compared to the previous close of Rs 14.35 on the National Stock Exchange.
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