Vedanta has introduced the Employee Stock Option Scheme 2026 (ESOS 2026), replacing its decade-old ESOP Scheme 2016 with a framework in which every option vests strictly on performance criteria set by the company’s Nomination and Remuneration Committee.
The new scheme provides for a maximum pool of 16.62 crore equity shares, equivalent to about 4.25% of the company’s paid-up share capital. The exercise price has been fixed at the face value of Re 1 per share. The vesting period can range from one to five years, depending on the horizon linked to each performance milestone.
The design marks a break from Vedanta’s 2016 scheme, which combined tenure-based and performance-based vesting. Under ESOS 2026, the tenure component is removed.
“The revised programme introduces a performance-based vesting framework, with employee stock options linked entirely to defined performance conditions,” Vedanta said in the clarification circulated to shareholders.
Implementation runs through Vedanta’s existing ESOS Trust, which will acquire shares through the secondary market rather than through fresh issuance, keeping dilution controlled. The overall scheme was cleared alongside the Vedanta Employee Share Purchase Plan 2026 (ESPP 2026) at a board meeting on 30 July 2026, with the two vehicles together making up a combined pool of up to 5% of paid-up capital.
The move sits within a broader industry rebalancing of equity compensation toward outcome-linked structures. Indian large-caps have increasingly leaned on performance conditions such as revenue milestones, EBITDA thresholds and total shareholder return benchmarks to gate ESOP vesting, replacing purely time-based grants that were common through the late 2010s. Compensation advisers have argued that the shift narrows the pay-for-performance gap and improves alignment with public shareholders, though it also raises the design and governance burden on remuneration committees.
Vedanta’s clarification made clear that no grants had been made under either ESOS 2026 or ESPP 2026 as of 30 July 2026. Group entities carved out through the recent five-way corporate split, including Vedanta Iron and Steel, Vedanta Power and Vedanta Oil and Gas, have separately opened postal ballots for their own 2026 ESOP and ESPP plans structured on similar principles.
