Texmaco Rail & Engineering Limited has clarified its stance on the Long Term Incentive Plan (LTIP) following recommendations from proxy advisory firm Institutional Investor Advisory Services (IiAS). The company emphasised that the LTIP is firmly based on performance metrics designed to align leadership incentives with long-term shareholder value creation.
The LTIP’s performance metrics include a balanced mix of financial and value-creation parameters such as EBITDA margin, EPS, ROCE, and Operating Cash Flow. These metrics carry weightages of 30%, 25%, 30%, and 15% respectively for each year. The final vesting will be determined by the average performance over the three-year scheme period.
Texmaco Rail highlighted that no vesting will occur if 85% of the stated targets are not met. This ensures that benefits accrue to grantees only upon achieving the defined growth metrics. The company has chosen not to disclose actual target thresholds in the resolution to protect commercially sensitive forward-looking information that could impact its competitive positioning.
The company assured that performance conditions are clearly defined, measurable, and approved by the Nomination & Remuneration Committee (NRC). Vesting outcomes will undergo rigorous evaluation against these pre-defined metrics. Texmaco Rail is committed to transparency and will disclose achievement levels and vesting outcomes in its Annual Report post-vesting, in line with evolving governance best practices.
Texmaco Rail believes this approach balances shareholder transparency with the practical considerations of operating in a competitive business environment. The company remains committed to strong governance standards and welcomes continued engagement on this matter.
Disclaimer: This article is based on a regulatory filing submitted to the National Stock Exchange of India (NSE).