New Delhi, April 13 (NationPress) Air India is set to launch a new performance-based stock options reward system aimed at enhancing employee productivity as the Tata Group seeks innovative measures to revitalize the struggling airline.

Eligible personnel, including pilots, engineers, and members of senior management, will have the opportunity to purchase shares post-granting of stock options, priced between the nominal Rs 4 face value and the market value at the time of the grant, as reported by Livemint on Monday.

This initiative, endorsed during an extraordinary general meeting on February 13, is intended to inspire employees and synchronize their contributions with the company's growth objectives. The program aims to reward and attract top talent within Air India and its subsidiaries.

“The goal of the Performance Stock Option Plan (PSOP) 2026 is to recognize the eligible employees of Air India and its subsidiaries, present or future, for their contributions and to encourage their involvement in the company’s growth and profitability,” stated the resolution from the meeting. “This plan is designed to attract, retain, and reward talent within the organization,” the report indicates.

The airline plans to issue approximately 227.1 million stock options, constituting 0.25 percent of its total share capital, as new shares for eligible employees, as disclosed to the corporate affairs ministry on April 6, the report further stated. Singapore Airlines has also been granted pre-emptive rights to preserve its 25.10 percent stake by acquiring additional shares if necessary.

The vesting period will range from one to five years, indicating that Tata is looking for ongoing commitment from its employees as part of this new reward framework. The nomination and remuneration committee will oversee eligibility, share distribution, and pricing, according to the report.

In contrast, India's other publicly listed airlines, such as IndiGo and SpiceJet, have already implemented ESOP schemes. The privately-held Akasa Air also operates a similar program. Air India previously distributed shares to nearly 8,000 employees during its acquisition from the government in January 2022, as part of an Employee Share Benefit Scheme managed by SBICAP Trustee Co Ltd.

Under this new performance-linked initiative, employees may only receive half of the shares if the airline meets less than 85 percent of its internal performance targets, as reported. This structure is aimed at incentivizing performance and fostering greater efficiency.

This update comes amid a leadership change at Air India, as CEO Campbell Wilson resigned on March 30, with plans to remain until a successor is appointed. His original term was set to conclude in July 2027.