Clarification on Proxy Advisor IiAS Recommendations for ESOP 2026 Postal Ballot Items

The company issued a clarification on IiAS's voting recommendations for Items 2–5 of its Postal Ballot Notice on VISL ESOP 2026.

Thu 24 Sep 2026

Vesting Structure

100% performance-linked, no time-based or guaranteed vesting

Vesting Period

Minimum 3 years, maximum 5 years

Grant Value Cap

100% of employee's annual fixed pay

Threshold to Overachievement Vesting

Threshold achievement vests 50%; overachievement capped at 100%

Share Acquisition Method

Trust to buy shares from secondary market, no incremental dilution

What happened

The company responded to voting recommendations issued by proxy advisory firm Institutional Investor Advisory Services (IiAS) on Items 2 to 5 of its Postal Ballot Notice relating to VISL ESOP 2026.

Item 2 - ESOP design

• Vesting is stated to be 100% performance-linked, with no time-based or guaranteed vesting; continued employment is still required for eligibility.
• Targets and thresholds come from the annual operating plan approved by the Board each financial year.
• Vesting determined over a minimum period of three years, within the maximum vesting period of five years under the scheme.
• Grant value for any employee will not exceed 100% of annual fixed pay.
• If a metric falls below its threshold, that metric scores zero. At threshold, vesting is 50% of the grant for that parameter; on overachievement it is capped at 100%.
• Malus and claw-back provisions apply.
• The Nomination and Remuneration Committee approves final vesting; its members cannot participate in the scheme.
• The company says it will provide enhanced disclosure of performance targets and actual achievement in future annual reports.

Weightage split

• Senior and Mid Management: Business Performance 50%, Individual Performance 40%, Strategic Objective 10%.
• Junior Management: Business Performance 50%, Individual Performance 50%.
• Within business performance for Iron Ore Business: Volume 50%, Cost 10%, NSR 25%, Carbon Footprint Reduction 15%.
• For ESL: Volume 30%, Cost 10%, NSR 10%, EBITDA 35%, Carbon Footprint Reduction 15%.

Item 3 - Extension to group employees

Extending the scheme to employees of the holding, subsidiary and associate companies is described as aligning key talent across the Vedanta ecosystem. The company says no dual employment or overlapping remuneration is created, and the cost of benefits will be cross-charged to the entity receiving the employee's services.

Items 4 and 5 - Trust route

The 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 shareholder-approved limits. Performance conditions include operational performance, profitability, cash flow, market capitalization, ESG goals and strategic objectives.

Correction noted

The company states the face value of each equity share is Re. 1/- per share, and that the reference to a face value of Rs. 2/- in the IiAS report is incorrect.

What it means for investors

This is an explanatory response ahead of shareholder voting on the ESOP resolutions. The outcome will depend on how shareholders vote on the postal ballot items.

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