Air India plans stock options for employees

New Delhi: Air India is planning to roll out a performance-linked stock options reward system for employees as part of the Tata Group’s broader strategy to revive the loss-making airline.

Under the proposed plan, eligible employees, including pilots, engineers, and senior management, will be granted stock options that can be exercised at prices ranging from the Rs 4 face value to the prevailing market value at the time of grant, according to a report.

The Performance Stock Option Plan (PSOP) 2026, approved at an extraordinary general meeting on February 13, is aimed at incentivising employees and aligning their performance with the airline’s long-term growth and profitability goals. The plan also seeks to attract and retain talent across Air India and its subsidiaries. As part of the scheme, the airline will issue around 227.1 million stock options, representing about 0.25 per cent of its total share capital. Singapore Airlines has been granted pre-emptive rights to maintain its 25.10 per cent stake by purchasing additional shares, if required.

The vesting period for the stock options will range from one to five years, encouraging employee retention. The nomination and remuneration committee will determine eligibility, allocation, and pricing.

Employees may receive only half the entitled shares if the airline achieves less than 85 per cent of its internal targets, linking rewards directly to performance outcomes.