Vedanta500295Executive stock options

Clarification to Proxy Advisory Firm's Recommendations on Postal Ballot ESOS/ESPP 2026 Items

Company responded to IiAS voting recommendations on Postal Ballot Items 1, 2, 3, 4 and 6.

By ScoutQuest · Thu 24 Sep 2026, 4:40 PM IST · 3 min read

ESOS 2026 Vesting Structure: 100% performance-linked, minimum 3-year performance period, maximum 5-year vesting period
Grant Value Cap: 100% of annual fixed pay per eligible employee
Share Acquisition Method: Trust will buy shares from secondary market, no incremental equity dilution
HZL Contribution: More than 90% of VEDL's consolidated EBITDA from continuing operations in FY26
Performance Vesting Thresholds: Threshold performance 50% of grant, overachievement capped at 100%

What this update is

Vedanta has issued a clarification in response to voting recommendations from Institutional Investor Advisory Services (IiAS), a proxy advisory firm, on Items 1, 2, 3, 4 and 6 of its Postal Ballot Notice dated August 28, 2026. Proxy advisors guide institutional shareholders on how to vote; companies often respond publicly with added explanation.

Item 1 — ESOS 2026 design

Vesting is stated to be 100% performance-linked, with no time-based or guaranteed vesting; continued employment is still required for eligibility.
Performance measured over a minimum period of three years, within the maximum vesting period of five years under ESOS 2026.
Grant value for any eligible employee will not exceed 100% of annual fixed pay.
If the minimum threshold for a metric is not met, that metric scores zero. Vesting at threshold performance is 50% of the grant for that parameter; on overachievement it is capped at 100%.
Malus and claw-back provisions apply.
Targets and thresholds are drawn from the annual operating plan approved by the Board each financial year. The Nomination and Remuneration Committee, whose members cannot participate in the scheme, approves final vesting.
The company says it will provide enhanced disclosure of performance targets and actual achievement in future annual reports.

Weightage split by grade

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

Within the 50% business performance weightage, metrics differ by business: Zinc uses Volume 60%, Cost 15%, NSR 10% and Carbon Footprint Reduction 15%; Copper uses EBITDA 40% and FCF 45%; FACOR uses Volume 50%, Cost 10%, NSR 25%; VGCB uses Volume 50%, NSR 25% and 10% on carbon footprint reduction.

Items 2 and 6 — extending the scheme across group companies

The ESOS/ESPP 2026 is proposed to be extended to employees of the holding company and subsidiary and associate companies. The company notes Hindustan Zinc Limited contributed more than 90% of VEDL's consolidated EBITDA for continuing operations in FY26, that HZL has participated in Vedanta's equity scheme over the past 10 years with option costs cross-charged to and borne by HZL, and that HZL's CEO is a Senior Management Personnel of VEDL. Vesting for HZL employees will be assessed against HZL-specific performance parameters. Costs will be cross-charged to the entity receiving the employee's services.

Items 3 and 4 — Trust and secondary acquisition

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 limits approved by shareholders. Holding of shares by the Trust does not confer immediate or assured benefit; options vest only on meeting conditions including continued employment and performance objectives covering operational performance, profitability, cash flow, market capitalisation, ESG goals and strategic objectives. Vedanta has used an ESOS Trust since the inception of ESOS 2016.

What investors may watch

The outcome of the postal ballot voting on these resolutions, and whether the promised enhanced disclosure of performance targets and achievement appears in future annual reports.

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