3mn fresh shares to be issued; rest to be acquired from market
THRISSUR: CSB Bank has decided to increase the volume of options under the Employees Stock Option Scheme 2019 (ESOS 2019) by a whopping 234 per cent – from 50 lakh shares to 1.67 crore, thus creating additional 1.17 crore options to be granted to its eligible employees.
The board has proposed to amend the scheme, which will be presented at the ensuing annual general meeting (AGM) of shareholders for its ratification. Under the existing scheme, ESOS 2019, the bank can allot only up to a maximum of 50 lakh shares to the Trust over a period of time.
A bank statement filed with stock markets on Friday (June 19) said, “On the recommendation of the Nomination & Remuneration Committee (NRC), the Board of Directors (of CSB Bank) approved to amend the ESOS 2019 by increasing the number of options reserved thereunder from 50 lakh to 1.67 crore (approx.) options by creating additional 1.17 crore (approx.) options for grant to the eligible employees of the Bank.”
In order to achieve the required number of equity shares corresponding to the additional options, the bank will issue up to 30 lakh fresh shares of Rs10 face value, whereas the ESOS Trust will acquire up to 86.73 lakh shares, which is 5 per cent of the paid up capital as of March 31, 2020, from the secondary market.
It was on May 4, 2019, the bank formulated the stock option scheme called ‘CSB Employees Stock Option Scheme 2019’ (ESOS 2019) after the approval from shareholders.
The scheme is intended to promote the culture of employee ownership and as well as to attract, retain, motivate and incentivize talents in the bank and as is the convention, the Scheme will be administered through an employee stock option trust (ESOS Trust).
CSB Bank has been going through one of its most spectacular and eventful periods ever since Fairfax Financial Holdings decided to buy a majority stake in the bank. This was followed by an IPO in December, 2019, and the shares of the bank are listed on both BSE and NSE.
The managing director, who oversaw the entry of Fairfax and the IPO, CVR Rajendran, has brought about a lot of changes including the ones that have been vehemently resisted by the bank officers – the reduction in retirement age. But at the same time, he could also boast the credit to turn around the bank, as is believed by a section of shareholders.
