Equity-based incentives have emerged as a key factor to attract and retain talent as corporate India recorded a 35% rise in such incentives this year over 2011, according to a PwC survey.
According to the 2012 Global Equity Incentives Survey conducted by PwC and the NASSP (National Association of Stock Plan Professionals), equity grant levels are back this year in role reversal from 2011.
"Globally, the appeal of performance awards seem to be on a decline among plain vanilla ESOP plans, while there is an increase in time-based options and restricted stock awards.
"Interestingly, this situation is reversed in India where there is a perceived increase in performance linkage in equity plans," PwC India Executive Director – People & Change Practice - Padmaja Alaganandan said.
The key drivers for offering employee equity programmes remain the same as in prior years, which include aligning compensation with business strategy and keeping pace with market trends.
The survey, which covered 351 multinational companies across 30 countries, also said India is one of the most challenging tax environments from a plan compliance perspective, along with countries like China, UK and Australia.
Companies are growing increasingly comfortable doing business on a global basis and taking on risk with doing business globally.
The survey added that "companies have generally restored grant levels to 2009 levels, and seem to be coming out of the recession with a newfound comfort in making business decisions on where to allocate internal resources relating to employee equity plans and determining what types of plans work for them".
