Tata Motors Passenger Vehicles has approved a new long-term, share-based incentive programme aimed at rewarding and retaining employees through equity participation. The scheme could potentially create pre-tax gains of nearly ₹168 crore for eligible employees, subject to vesting and performance conditions.
According to a regulatory filing, the company’s board has approved the adoption of the Tata Motors Passenger Vehicles Share-based Long Term Incentive Scheme 2026. The scheme allows the company to issue up to 50 lakh performance share units (PSUs) to eligible employees.
Each PSU will entitle employees to acquire one equity share of the company at an exercise price of ₹2 per share, equivalent to the stock’s face value. Based on the company’s closing share price of ₹338, the total value of shares covered under the programme stands at approximately ₹169 crore. If all units vest and are exercised, employees would collectively pay around ₹1 crore to purchase the shares, creating a potential gain of nearly ₹168 crore before taxes.
The company stated that the scheme would result in a maximum dilution of around 0.14% of its issued share capital. Employees receiving vested units will be required to exercise them within 12 months from the vesting date.
The filing does not specify how the grants will be distributed across the workforce. Such programmes are typically designed around role criticality, performance metrics, business priorities and retention requirements, with senior management and high-performing specialist roles often weighted more heavily.
The move comes in the same week that the Tata Motors Passenger Vehicles board announced a leadership change in its HR function, with Anjali Byce resigning as Chief Human Resources Officer effective June 30 and Sitaram Kandi set to take over from July 1, 2026. The stock incentive plan will likely sit at the centre of how the new CHRO designs retention frameworks during the company’s EV scale-up.
The approval also reflects a wider shift across the Indian automotive industry, where companies are increasingly using stock-linked compensation to attract and retain talent beyond traditional manufacturing roles. As mobility businesses evolve toward software, electronics and electric technologies, employers are competing more aggressively for specialised digital, AI and connected vehicle skills, and equity-linked rewards have become a key part of that competition.
