SBI Considering Employees Stock Option Plan

State Bank of India (SBI) Chairperson Arundhati Bhattacharya has said that the bank was mulling the option to issue Employees Stock Option Plan (ESOP) this year. “We are now considering an ESOP, which is basically something where you give an option and they exercise the option at a later date depending upon what is the share price in the market. So, we are looking at that ESOP scheme,” said Bhattacharya.

SBI was earlier considering issuing Employees Stock Purchase Scheme (ESPS) – a share purchase scheme. “At that point, SBI’s shares were at a very low price,and it would have made sense. Since then, prices have improved, and it is difficult for our employees to purchase this,’’ she said.

This would be based on ‘performance parameters.’ “If you perform as per the target given to you, then you will get a certain number of options, which will be locked in for a period of time, say one year. And then subsequent to that one year, you will exercise the option if you find the value has gone up. If it hasn’t gone up, you can allow it to lapse,” she said.

“My intention is to make it available to all. I think we all need to work as one team. Therefore, it would be nice if we can give it to everybody. But we have to find out performance parameters for every job. That is a big job. So, we are looking at how that can be done,” she added.