Vedanta Aluminium Metal544780Admin disclosure update

Clarification On Proxy Advisory Firm's Recommendations For Postal Ballot ESOP Resolutions

Company has replied to IiAS's voting recommendations on Items 2–5 of its Postal Ballot Notice.

By ScoutQuest · Thu 24 Sep 2026, 4:50 PM IST · 2 min read

100%Grant value cap as share of annual fixed pay

Grant value cap as share of annual fixed pay: 100%.

ESOP Vesting Structure: 100% performance-linked, minimum 3-year performance period within 5-year maximum vesting period
Grant Value Cap: 100% of annual fixed pay per employee
Share Acquisition Method: Trust will buy shares from secondary market, no incremental equity dilution
Performance Metrics - Aluminium: Volume 20%, Cost 50%, NSR 15%, Carbon Footprint Reduction 15%
Vesting Performance Levels: Threshold performance: 50% vesting; overachievement capped at 100%

What this update is

The company has responded to voting recommendations issued by proxy advisory firm Institutional Investor Advisory Services (IiAS) on Items 2 to 5 of its Postal Ballot Notice dated August 27, 2026. Proxy advisors guide institutional shareholders on how to vote; companies often publish clarifications before voting closes.

Item 2 – VAML ESOP 2026 design

Vesting is stated to be 100% performance-linked, with no time-based or guaranteed vesting; continued employment is still required to be eligible.
Targets and thresholds come from the annual operating plan approved by the Board at the start of each financial year; the scheme is multi-year.
Grant value for any employee will not exceed 100% of annual fixed pay.
Vesting is measured over a minimum period of three years, within the maximum vesting period of five years under the scheme.
Where a metric misses its threshold, that metric scores zero. At threshold performance, vesting is 50% of the grant for that parameter; on overachievement it is capped at 100%.
Malus and clawback provisions apply.

Weightage split by grade

Senior and Mid Management: Business Performance 50%, Individual Performance 40%, Strategic Objective 10%.
Junior Management: Business Performance 50%, Individual Performance 50%.

Within the business performance component (50%) for Aluminium: Volume 20%, Cost 50%, NSR 15%, Carbon Footprint Reduction 15%. Corporate is a weighted average based on target EBITDA.

Performance parameters disclosed include volume, cost of production, EBITDA, free cash flow, market capitalisation and profit margins. The Nomination and Remuneration Committee, whose members cannot participate in the scheme, approves final vesting. The company says it will disclose performance targets and actual achievement in future annual reports.

Item 3 – Extending the scheme to group employees

The company says extending VAML ESOP 2026 to employees of the holding company and subsidiary and associate companies aligns key talent across the Vedanta ecosystem. It states the holding company provides strategic, technical, commercial and functional support to VAML, and that the cost of benefits will be cross-charged to the entity receiving the employee's services.

Items 4 and 5 – Trust and secondary acquisition

The ESOP Trust will acquire existing shares from the secondary market rather than the company issuing new shares, so the company states there is no incremental equity dilution beyond the limits approved by shareholders. Holding of shares by the Trust does not give employees any assured benefit; options vest only on meeting performance conditions. The group has used an ESOS Trust since the inception of its ESOS 2016 scheme.

How investors may read it

This is a governance clarification ahead of a shareholder vote. It addresses common investor concerns on ESOP schemes — dilution, disclosure of targets and generosity of grants — by pointing to performance gating, caps and the secondary-market route. The outcome of the postal ballot will depend on shareholder voting.

50%Aluminium business - Cost weightage

Senior & Mid Management - Individual Performance weightage40%

Senior & Mid Management - Strategic Objective weightage10%

Aluminium business - Cost weightage 50%: Senior & Mid Management - Individual Performance weightage 40%, Senior & Mid Management - Strategic Objective weightage 10%.

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