Examining the Scope and Regulatory Framework Concerning Employees’ Benefit Schemes in India
Volume 10 Issue 1 (2017)
With the increasing importance of human capital in the modern era, it has become quintessential for companies to shift from traditional channels of rewarding employees with cash, to channels which align the interest of the employees with long term interest of the companies. In addition to this, the need of the companies to retain their senior employees as well as attract top talents from the industry has compelled them to come out with profitable remuneration schemes. Employees’ benefit schemes have, in particular, become major tools for rewarding employees, either through cash or shares of the companies, as a part of their remuneration. Traditionally offered as only employees’ stock option or purchase schemes, the ambit of employees’ benefit schemes has widened over time to cover various other types of benefits. Against this backdrop, I seek to expatiate upon the scope of employees’ benefit schemes offered by both listed companies as well as unlisted companies in India, the manner in which these schemes are regulated and governed under the extant legal regime, and the possible drawbacks that may arise while implementing these schemes.