Air India Unveils Performance-Linked Stock Option Plan for Employees

Air India has approved a Performance-Linked Stock Option Plan (PSOP) for employees at an extraordinary general meeting held on February 13, 2026, as per LiveMint report.  

This comes as the airline continues its restructuring under the Tata Group following its acquisition in 2022. The plan is to link employee incentives with company performance and retention needs. 

Size Of Issuance and Pricing 

According to filings with the Corporate Affairs Ministry dated 6 April 2026, the airline will issue about 227.1 million stock options. This represents 0.25% of its total share capital and will be issued as new shares.  

The exercise price will range from the face value of ₹4 per share to the prevailing market value at the time of grant. 

Eligibility and Vesting Terms 

The scheme covers a range of employees, including pilots, engineers, and senior management. A vesting period of 1 to 5 years has been set, during which employees must remain with the airline before exercising their options.  

The nomination and remuneration committee will decide on allocations and pricing. Share vesting will depend on performance, with lower outcomes if internal targets fall below defined thresholds. 

Shareholding Structure 

The Tata Group holds a 73.82% stake in Air India, while Singapore Airlines owns 25.10%. Pre-emptive rights have been offered to Singapore Airlines, allowing it to maintain its shareholding by participating in future issuances linked to the scheme. 

Financial Performance and Earlier Scheme 

Air India continues to report losses within the Tata Group. In FY25, standalone revenue increased 13% to ₹61,080 crore, while losses reduced to ₹3,976 crore from ₹5,031 crore.  

Its subsidiary, Air India Express, reported revenue growth of 26% to ₹16,033 crore, with losses rising to ₹5,822 crore. In 2022, around 8,000 employees received shares under an earlier scheme covering about 1.08% equity. 

Management Update 

Chief Executive Campbell Wilson resigned on 30 March and remains in position until a replacement is appointed. Chairman N. Chandrasekaran addressed employees on 10 April, asking them to focus on execution. 

Read More: Hyatt Hotels Plans Expansion in India with New Brands and Acquisition Strategy! 

Conclusion 

The stock option plan ties incentives to defined targets and retention periods, with allocations based on internal performance benchmarks. It forms part of the airline’s ongoing restructuring measures. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.   
 
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.