NEW DELHI — Air India is preparing to introduce a performance-linked stock options program for employees as part of efforts by the Tata Group to improve efficiency and turn around the airline’s financial performance.
The proposed plan will allow eligible employees, including pilots, engineers, and senior management, to receive stock options that can be converted into shares at prices ranging from the face value of ₹4 to the prevailing market price at the time of grant, according to a report published Monday.
The initiative, approved at an extraordinary general meeting on February 13, is aimed at aligning employee performance with the airline’s long-term growth strategy while helping attract and retain talent across Air India and its subsidiaries.
“The objective of PSOP (performance stock option plan) 2026 is to reward the eligible employees of Air India and its subsidiaries, present or future, for their performance and to motivate them to contribute to the growth and profitability of the company,” the resolution stated. “The plan aims to attract, retain and reward talent in the organisation.”
Under the plan, Air India is expected to issue approximately 227.1 million stock options, representing about 0.25 percent of its total share capital, through the creation of new shares. The disclosure was made in a filing with the corporate affairs ministry earlier this month.
Singapore Airlines, which holds a 25.10 percent stake in Air India, has been granted pre-emptive rights that would allow it to maintain its shareholding by purchasing additional shares if necessary.
The stock options will vest over a period of one to five years, requiring employees to remain with the company to fully benefit from the program. Decisions on eligibility, allocation, and pricing will be determined by the airline’s nomination and remuneration committee.
The structure of the plan ties rewards directly to performance. Employees may receive only half of their allocated shares if the airline achieves less than 85 percent of its internal targets, according to the report.
Other Indian carriers, including IndiGo and SpiceJet, have already implemented similar employee stock ownership plans, while privately held Akasa Air also offers comparable incentives.
Air India had previously distributed shares to nearly 8,000 employees as part of an employee benefit scheme during its acquisition from the government in January 2022.
The move comes at a time of leadership transition within the airline. CEO Campbell Wilson resigned on March 30 and will remain in his role until a successor is appointed. His term had been scheduled to run through July 2027. (Source: IANS)
