MUMBAI: Mukesh Ambani-owned Reliance Jio Infocomm is planning to roll out stock options for its employees, which could be a reward for the pace at which subscribers are being added as well as a talent retention and attraction strategy of the company, a person familiar with the matter said.
The stock options programme is currently in the planning stage and could be rolled out later this year, the person added. The company, which launched 4G services last September, did not respond to emailed queries on the subject.
Reliance Jio, with its 30,000-plus permanent employees, will possibly introduce stock options initially for senior executives, another person said. All leading telcos such as Bharti Airtel, Idea Cellular and Vodafone India have employee stock option (Esops) plans.
Esops are usually given once a year and can range between 10% and 200% of an employee’s salary. These are over and above the compensation, and act as a talent retention tool.
Jio’s parent Reliance Industries, too, has discussed with compensation experts the option of Esops for senior executives. The company is believed to be in the process of launching the programme, and 10-15% of senior executives’ compensation could be in the form of Esops.
“In case of Jio, the percentage may be similar to the parent firm. But since Jio is unlisted, it could be given in the form of stock appreciation rights,” said the head of a compensation consulting company.
Stock appreciation rights are a bonus given to employees which equals the rise in a company’s stock value. Employees do not have to pay the exercise price and hence, can receive proceeds from stock price increases, without coughing up anything.
Since its official launch in September, Jio, with its free voice and data offer, has attracted about half a million subscribers a day and is believed to have already added over 65 million customers. It has been quite the disruptor in the sector with its tariff plans that offer free voice calls and cheap Internet. This has forced incumbent telcos to slash tariffs as well.
Analysts say the biggest challenge for Reliance Jio would be to ensure that subscribers who have signed up do not migrate to rival telcos, once the free offer ends. And this is where Esops will come in handy, especially, in retaining key people tasked with customer retention.
“In India, and indeed globally, telecom majors offer Esops to senior ranks. This move will help Jio retain employees for a longer period,” said a telecom analyst for a top consulting firm who did not want to be named.
In October, Jio had handed out 7-15% increments to junior and middle-level employees and 5-10% to seniors — slightly better than industry average of 7-12%.