Institutional Investor Advisory Services has opposed Ujjivan Small Finance Bank's proposed restricted stock unit scheme, citing inadequate disclosure clarity. According to reports from The Economic Times, IIAS told investors it does not support the bank's move to offer up to 20 million RSUs to senior leadership at face value. The bank has sought shareholders' approval for the Ujjivan RSU Scheme-2026, which will result in 1% dilution on the expanded capital base.
As reported by The Economic Times, IIAS stated that in the absence of clarity regarding vesting of options, it does not support the resolution. The proxy advisory firm expects detailed disclosures on weightages with respect to performance metrics, performance targets, or a commitment to disclose such targets in the annual report after vesting. Additionally, IIAS emphasized that RSU vesting should be subject to continued employment with the bank.
According to the bank's stock exchange filing reported by The Economic Times, each vesting will occur only if the bank achieves not less than 105% of its budgeted revenue and profit targets, as approved by the board. The bank confirmed that once the first vesting condition is satisfied - achieving 105% of budgeted revenue and profit targets - individual performance rating must be at least 'meets expectations' and above to be eligible for RSU vesting. An RSU is a type of equity compensation granted by employers at a future date, instead of offering actual shares immediately.
