Seven billionaires, courtesy Esops

Four L&T executives, 2 from RIL and 1 from Tech Mahindra own over Rs 100 crore (Rs 1 billion) each in stock options.

Seven top executives from Larsen & Toubro, Reliance Industries, and Tech Mahindra hold Employee Stock Options (Esops) that are worth in excess of Rs 100 crore for each at current market prices.

Larsen & Toubro has four chief executives who have Esops worth over Rs 100 crore each. A M Naik, chairman and managing director of L&T, is the richest CEO with Esops worth about Rs 270 crore (Rs 2.7 billion) at current market prices.

Vineet Nayyar, vice-chairman, managing director and chief executive officer of Tech Mahindra, who holds 15.47 lakh shares of the company, ranks number two with his stock options worth Rs 199 crore.

J P Nayak, president and director of L&T, is number three with esops worth Rs 156.75 crore (Rs 1.56 billion) and Y M Deosthalee, whole time director and chief financial officer, ranks number four with stock options worth Rs 154.50 crore (Rs 1.54 billion). R N Mukhija, president and director of L&T, is number seven with his stock options worth of Rs 105.50 crore (Rs 1.05 billion).

Nikhil and Hital Meswani, both executive directors with Reliance Industries, rank a joint fifth with each of their stock options worth Rs 144 crore (Rs 1.44 billion).

The brothers, who received an annual compensation of Rs 7.77 crore (Rs 77.7 million) each in fiscal 2006-07, were also given 7,00,000 stock options each. There are some notable names who do not figure in the Rs 100 crore club but still deserve mention.

Chairman and CEO of HDFC, Deepak S Parekh, chairman and chief executive officer, HDFC, has stock options worth Rs 63.52 crore, K V Kamath, managing director and chief executive officer, ICICI Bank, has esops worth Rs 55.88 crore and K Venkataramanan, director, L&T, holds stock options worth Rs 88.55 crore (Rs 885.5 million).

Rajesh Hukku, chairman, i-flex, has esops worth Rs 78.03 crore, while Vice-chairman Deepak Ghaisas has stock options worth Rs 70.60 crore (Rs 706 million). Esops are an important tool in the hands of companies that is used to retain key personnel, at a time when there is an acute shortage of quality managerial talent.

Disclosures made to stock exchanges indicate that 981 employees hold shares allotted through esops which are currently valued at Rs 3,891 crore (Rs 38.91 billion).

Of the 981 employees in 59 listed companies, as many as 389 are crorepatis, 170 employees are each worth between Rs 50 lakh (Rs 5 million) and Rs 99 lakh (Rs 9.9 million), while 287 employees are millionaires whose stocks are worth between Rs 10 lakh (Rs 1 million) and Rs 49 lakh (Rs 4.9 million) each.

The Esop holdings reveal that ICICI Bank is has the maximum number of crorepati employees (173), Kotak Mahindra Bank has 26, I-flex 21, L&T 19, HDFC 18 and ACC and Geometrics Software each have 15 crorepati employees.

Till March 2007, top executives in 40 leading companies have received Rs 12,000 crore (Rs 120 billion) worth of equity shares under employee stock options. Data in annual reports and information given to stock exchanges about employee stock options indicates that shares valued at Rs 12,000 crore are outstanding with these companies which will be offered as stock options in the coming years.