From shopfloor to C-suite: Mahindra offers Diwali Esops to 14,000 employees

Time of India

2 days ago

The Mahindra Group has announced a one-time
employee stock ownership plan
(Esop) grant for 12,000-14,000 employees, including shop floor workers for the first time ever. The move across three core companies—Mahindra & Mahindra (auto and farm sector), Mahindra Electric Automobile and Mahindra Last Mile Mobility —comes amid surging sales and profit on the back of hit products such as the Thar driving the M&M stock up more than 12 times in five years.
Mahindra has also overtaken Hyundai to become the country's second biggest manufacturer of passenger vehicles, thanks to its range of SUVs.
The Esops will help broad-based wealth creation, the tractor-to-technology conglomerate said in an internal circular. ET has seen the note. It did not reveal how many shares the group will earmark for this purpose, but people in the know estimate the total outflow to be in the range of ₹ 400-450 crore. While granting Esops to keep employees motivated is not unusual, this could be the first time a large Indian conglomerate extends these benefits to shopfloor workers. The Esops, structured as
restricted stock units
(RSUs).
Productivity Boost?
The grant is being positioned as a reward for long-term contribution and a tool to align employees with value creation. 'This special grant reflects the organisation's appreciation for your efforts, makes you a co-owner of this enterprise, and gives you a share in the value that you have helped co-create,' said Anish Shah, group chief executive and managing director of M&M, in a note to employees.
Rajiv Agarwal, department chair for strategy at leading B-school SPJMR, said with this move, Mahindra is fostering a productive environment, where labour participation drives higher overall productivity. 'This approach not only supports the company's growth but also allows employees to benefit from the rise in the stock price,' Agarwal said. 'It's a smart strategy — compensating workers not just with their salaries for the hours they work, but also rewarding them when the company does well. This dual benefit truly aligns employees' interests with the company's success.'
The Esop scheme comes on the back of a sharp surge in valuations of Mahindra Electric and Mahindra Last Mile as well. Both have seen over 10x growth in the past five years, supported by strong execution, strategic focus and new business momentum.
M&M's shares closed at ₹ 3,160 on the BSE on Friday, down 1.35 per cent from its previous close. Its market cap stood at ₹ 3,92,925 crore. The Esop shares will be granted to employees on permanent payrolls with at least 12 months' tenure in the group as of the announcement date. Depending on their income tax bracket, the beneficiaries may have to pay tax on the profits they make when they sell their Esop shares. However, shopfloor workers who earn below the taxable income limit won't have to pay any tax on these gains.
The Mahindra Group communication credited executive chairman Anand Mahindra and executive director Rajesh Jejurikar for steering the transformation, while thanking employees' families and retired leaders for their support.