Hexaware Technologies seeks shareholder approval for new RSU plan and ESOP amendments
- Shareholders to vote on new 2 million RSU plan and ESOP pool expansion to 41.8 million options
- Voting period runs from September 10, 2026, to October 09, 2026, via remote e-voting
- ESOP pool increase adds 17.5 million options, a 72% rise from the previous limit
- CEO R. Srikrishna's incentive payout reduced by 50% under amended exit agreement
- Trust acquisition limits set at 0.5% annually and 1% cumulatively of paid-up capital
*this image is generated using AI for illustrative purposes only.
Hexaware Technologies has issued a postal ballot notice seeking shareholder approval for a new Restricted Stock Unit (RSU) plan and significant amendments to its existing Employee Stock Option Plan (ESOP). The remote e-voting process is scheduled to run from September 10, 2026, to October 09, 2026.
The company proposes to introduce the Hexaware Restricted Stock Unit Plan 2026, creating a pool of 2 million RSUs for eligible employees. This initiative aims to align employee interests with long-term organizational goals through equity-based remuneration.
Key Resolutions
Shareholders will vote on eight special and ordinary resolutions covering employee benefits and executive incentives:
- Approval of the Hexaware Restricted Stock Unit Plan 2026, authorizing the grant of up to 2 million RSUs.
- Extension of the RSU Plan benefits to eligible employees of subsidiary companies in or outside India.
- Implementation of the RSU Plan through the Hexaware Employees Benefit Trust via fresh allotment or secondary market acquisition.
- Authorization for the Trust to acquire shares from the secondary market, capped at 0.5% of paid-up capital annually and 1% cumulatively.
- Provision of financial assistance by the company to the Trust, limited to 5% of aggregate paid-up share capital and free reserves.
- Amendment of the Hexaware Employees Stock Option Plan 2024, increasing the options pool from 24,316,400 to 41,816,400 options.
- Approval for granting stock options or RSUs exceeding 1% of issued/paid-up equity capital in any single year.
- Amendment to the Incentive Payment Agreement with outgoing CEO Mr. R. Srikrishna, reducing his potential payout by 50% upon cessation of employment.
What the Numbers Show
The expansion of the ESOP pool represents a significant increase in potential dilution. The proposed addition of 17,500,000 stock options raises the total authorized pool by approximately 72%, moving from 24.3 million to 41.8 million options. Concurrently, the introduction of a separate 2 million RSU pool indicates a dual-track approach to equity compensation, likely designed to offer flexibility in vesting structures and tax treatments for different employee cohorts.
Trust Structure and Acquisition Limits
The Hexaware Employees Benefit Trust will administer both plans. Under the SBEB Regulations, secondary acquisitions by the Trust are strictly regulated. The Trust cannot hold more than 1% of the paid-up equity capital at any point, with annual acquisitions capped at 0.5%. The company may provide interest-free loans to the Trust up to the statutory ceiling of 5% of its paid-up capital and free reserves to facilitate these acquisitions.
Executive Incentive Amendment
The ballot also seeks approval for an amendment to the Incentive Payment Agreement with Mr. R. Srikrishna, who will cease to be CEO on October 28, 2026. The revised agreement reduces his indicative cash awards payable by CA Sebright Investments by 50%. For instance, a Multiple of Invested Capital (MOIC) of 3.0x would now yield $10 million, down from the originally approved $20 million. Interested parties are required to abstain from voting on this resolution.
Historical Stock Returns for Hexaware Technologies
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -1.72% | -7.48% | -9.69% | +10.87% | -29.69% | 0.0% |
How will the 72% expansion of the ESOP pool and the new 2 million RSU allocation impact Hexaware's earnings per share (EPS) dilution over the next three to five years?
What does the 50% reduction in the outgoing CEO's incentive payout signal about the board's stance on executive compensation governance and retention strategies for the incoming leadership?
Will the dual-track equity compensation structure (ESOPs and RSUs) help Hexaware better compete with global IT peers for specialized talent in high-demand domains like AI and cloud computing?
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