Sequent is giving huge ESOP to the new CEO
- He is getting 71, lakhs shares at @86 per share, the same price they gave to Manish Gupta- earlier CEO.
At the time of giving ESOP last year, sequent management said they are for talent retention and hence offered at Rs 86; the same price Carlyle bought the company. However, as the new CEO is joining much later, I am surprised that they offer i the same to him.
At CMP of 130- they are worth around 100 cr.
The CEO has a salary of 4-5 cr. So his interest is aligned to shareholders’ interest, but even if the share price does not perform well in the next 4/5 years - ESOP vesting duration- he will still earn the decent amount as his acquisition price is 86.
Also, there are no preconditions attached to these ESOP, in the sense to get them he has to deliver PAT growth or share price growth.
So just when shareholders were looking forward to a reduction in ESOP expenses in P&L, this shall hit again. I guess CEO ESOP cost shall impact next 4-5 quarters profit by at 6-10 cr per quarter (guesstimate).
