Air India is preparing to roll out a new employee reward scheme based on performance-linked stock options, as part of efforts by the Tata Group to improve the airline’s financial and operational performance.
The proposed plan will grant eligible staff, including pilots, engineers and senior executives, stock options. They can later convert these into shares at a price ranging from face value to prevailing market levels at the time of grant.
The initiative, approved during an extraordinary general meeting in February, aims at linking employee performance with the company’s growth strategy. It seeks to encourage productivity while helping the airline retain and attract skilled professionals.
As part of the programme, the airline plans to issue over 227 million stock options, representing a small fraction of its overall equity base. The scheme will also allow Singapore Airlines to maintain its existing stake by purchasing additional shares if required.
The vesting period for these options will range between one and five years, indicating a focus on long-term employee engagement.
The company’s nomination and remuneration committee will determine allocation, eligibility and pricing.
The structure of the scheme is performance-driven. Employees may receive reduced benefits if internal targets are not fully met, reinforcing accountability and efficiency across operations.
Other airlines in India, such as IndiGo and SpiceJet, have already implemented similar stock-based incentive plans, while privately held Akasa Air also offers such benefits.
The move comes during a period of transition for Air India, following the resignation of CEO Campbell Wilson. He will remain in his role until a successor takes charge.
The airline is undergoing a broader restructuring effort, with the new incentive plan seen as a step towards aligning employee performance with long-term business goals.
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