NewsAequs Limited Clarifies ESOP 2025 Exercise Price and Vesting Criteria Following Proxy Advisor FeedbackAequs Limited Clarifies ESOP 2025 Exercise Price and Vesting Criteria Following Proxy Advisor Feedback
Aequus Limited issued clarification on ESOP 2025 following proxy advisor feedback, defining exercise price as last traded price on highest volume exchange preceding grant date. The vesting structure combines 50% time-based vesting over 5 years and performance-based vesting tied to revenue, EBITDA, PAT metrics over 5-7 years. The plan complies with Companies Act 2013 and SEBI regulations under NRC supervision.
*this image is generated using AI for illustrative purposes only.
Aequs Limited has provided additional clarification on its Employee Stock Option Plan 2025 (ESOP 2025) following feedback from proxy advisors regarding the postal ballot notice dated February 25, 2026. The company addressed specific concerns about the exercise price methodology and vesting criteria that were raised by proxy advisors.
Proxy Advisor Concerns Addressed
The proxy advisors had expressed concerns about the lack of clarity regarding the exercise price, which could range between face value and market price at a significant discount, and the vesting criteria. They specifically noted that the amended scheme did not provide sufficient clarity with respect to exercise price and vesting criteria, allowing the Nomination & Remuneration Committee (NRC) excessive flexibility in determining these parameters.
Exercise Price Methodology Clarified
The company has now clarified that for all grants under ESOP 2025, the exercise price shall be the last traded price of equity shares of Aequus Limited on the recognized stock exchange having the highest trading volume on the trading day immediately preceding the date of grant of options by the NRC. This pricing mechanism ensures market-linked and transparent pricing without permitting arbitrary pricing decisions.
Vesting Structure Details
Aequs follows a combination of time-based and performance-based vesting criteria as per established practice:
| Vesting Type | Structure | Details |
|---|---|---|
| Time-based | 50% of total options | 10% vesting annually over 5 years |
| Performance-based | Remaining options | Based on revenue, EBITDA, PAT metrics |
| Vesting Period | Time-based | Typically 5 years |
| Vesting Period | Performance-based | 5-7 years depending on metrics achievement |
Regulatory Compliance Framework
The ESOP 2025 is implemented in strict accordance with the Companies Act, 2013 and the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. The plan is administered under the supervision of the Nomination and Remuneration Committee, ensuring proper governance and oversight.
Performance Parameters and Flexibility
The performance-based vesting includes achievement of specified thresholds such as revenue, EBITDA, and PAT targets. The NRC retains the authority to include additional performance parameters and may vary, alter, or modify vesting conditions, provided such changes are not detrimental to the interests of grantees. The minimum vesting period is set at 1 year from the grant date, with a maximum period of 7 years.
The clarification was signed by Company Secretary and Compliance Officer Ravi Mallikarjun Hugar on March 23, 2026, and has been made available on the company's website for shareholder access.
Historical Stock Returns for Aequs
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -1.82% | -0.57% | -15.05% | -19.92% | -19.92% | -19.92% |
How will the market-linked exercise price methodology impact employee retention and attraction compared to Aequs' previous ESOP structures?
What specific revenue, EBITDA, and PAT targets has Aequs set for the performance-based vesting component of ESOP 2025?
Will proxy advisors' acceptance of these clarifications influence other companies to adopt similar transparent ESOP pricing mechanisms?
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