Shares of Swiss cement maker Holcim is now part of the remuneration of the senior managers of ACC. This is intended to increase the alignment between the world’s second-largest and India’s largest cement firm.
As many as 55 of ACC top managers have started receiving Holcim stock this year. Under the scheme in force, a part of the annual performance bonus of eligible ACC managers gets converted into the Holcim stock at a fixed rate, which is at a discount from the ruling market price of the stock. These shares come with a lock-in period. ACC CEO Sumit Banerjee confirmed the development.
A cement analyst said the Holcim stock is seen to be a better option by ACC managers than shares of their own company. “It may be perceived as a good gesture by Holcim that it cares for ACC executives. Plus, the stock option allows ACC managers to benefit from the good work done by their colleagues in other Holcim outfits across the globe. This is a nice feeling,” he added. ACC had scrapped its own employees stock option plan (Esop) in 2005.
The fundamental idea is to align the interests of senior ACC employees with that of the company’s largest shareholder. “ACC executives need to get used to the idea that they are working to improve Holcim’s valuation,” said a person familiar with the situation. According to another analyst, the alignment with Indian operations is critical for Holcim. “Holcim earns nearly 17-18% of its global topline in India. So, its only natural that it would attach importance on further consolidating the alignment with Indian outfits,” he added.
There is as yet no such programme at its other Indian outfit — Ambuja Cement. However, experts said a similar stock option may be launched at Ambuja Cement as well. For the record, Holcim controls a fourth of Indian market with an annual production capacity of 39 million tonne.
No comments:
Post a Comment