India Infoline has replaced the warrants which were issued to the four top ex-CLSA executives Bharat Parajia, H Nemkumar, Aniruddha Dange and Vasudev Jagannath, with stock options. Last month these executives had surrendered the equity warrants that were issued to them as the stock price had crashed and it would not have been feasible to convert the warrants at their previous price (Rs 440) as the current market price is around Rs 52 which after adjusting for the stock split is Rs 260 i.e. 41% below the warrant price.
The financial services firm has now disclosed that it is coming up with a mega stock option plan which will give Bharat Parajia and H Nemkumar - 10 million options each while Aniruddha Dange and Vasudev Jagannath are to get 8 million options each. The options are priced at Rs 45.3 which means Parajia and Nemkumar will get options worth Rs 45 crore each ($9.5 million) and Dange and Jagannath will get Rs 36.25 crore ($7.7 million) each.
Earlier Bharat Parajia (ex-director of sales at CLSA in Singapore) and H Nemkumar (former country head for CLSA India) were to receive 25 lakh warrants each while Aniruddha Dange (former head of research at CLSA India) and Vasudev Jagannath (ex-head of sales for CLSA India) were to get 20 lakh warrants each. The quartet were roped in from CLSA with a cumulative sign-on bonus of Rs 44 crore last year.
They had to bring in a total of Rs 396 crore for the warrants out of which around Rs 40 crore was to be paid upfront as against their Rs 44 crore sign-on bonus. They had to bring in the remaining Rs 350 crore or so within the next 18 months as a part of the transaction. It was not clear how these executives would have brought in that much cash to pay for the conversion of remaining warrants.