Vodafone India and Idea Cellular’s merged entity may offer stock options to top executives. According to a report by the Economic Times, the stock options may include restrictive stock units and preferential shares besides regular employee stock options, even as both the companies have reportedly hired Aon, a global HR consulting company, to set the salary structures of all employees, including the top team.
The senior management in Vodafone India already have stocks in the parent company. “They have to be offered shares in the merged company at an agreed conversion ratio,” a source told the publication.
Idea Cellular currently employs around 11,000 plus, while Vodafone India has around 10,000 people working. The merger with both the companies is most likely to be completed around March-April period and just requires approvals from Department of Telecommunications (DoT).
The report said that around 20-30% of a company workforce is made up of senior management, while most of the others make up the middle order followed by the junior segment.
“For junior and middle management, it will be fixed, and variable pay with retention offers thrown in for those in niche areas,” another source told the publication.
In a bid to integrate operations of Vodafone and Idea Cellular, both the companies recently formed a project management office as the nodal body spearheaded by former CEO of Vodafone Romania Ravinder Takkar. Both the companies have set up common teams that report to this project management office.
Notably, both the companies have already started the exercise to shortlist senior executives that will play key roles in the merged entity. It is expected that 100 senior management staff from each company are being assessed for suitability in the merged company.
Furthermore, Vodafone India has already appointed former DEN Network CFO, Manish Dawar, as it finance head who will take on the role in the merged entity, even through Aditya Birla Group chairman Kumar Mangalam Birla has already been named the chairman of the merged company.
The proposed merger of Vodafone India and Idea Cellular will create the nation’s largest telecom operator. A new Vodafone-Idea entity would have about 390 million users, exceeding current market leader Bharti Airtel’s 266 million.
The combined entity will also be the largest by revenue market share of around 40% share with combined revenue of Rs78,000 crore, and 35% customer market share. Bharti Airtel is currently the leader in revenue terms.