The $17 billion oil-to-shipping Essar group has put in place a key talent account management structure to help develop and retain a core team of 253 next generation leaders across its various businesses who are all under 35 years of age.
Adil Malia, group president human resources at Essar group, said they are applying the concept of key account management to develop their next generation leaders. “Normally, it is a concept used by marketers who assign key relationship managers to drive critical large accounts with a single point interface. We will have a dedicated team of managers who looks at the all round development of our next generation leaders," said Malia.
With operations in more than 25 countries across five continents, the group employs 82,000 people.
The group has identified key people across its energy; infrastructure, steel and services businesses that it feels are critical human talent. “Survival in this market requires organizational and people capacity building. People are the only factor of production that is value creating. Every other factor of production has inert potential that needs to be exploited by human intervention,” said Malia.
These 253 identified next gen stars have all been with the group for the past five years and have scored in the high performer and high potential category consistently for the last five years. By providing focused career management and development, growth and total rewards management, training, fast track assignments the GenEssar programme as it’s called hopes to ensure the organisation has a second rung of leaders who will allow it to dynamically adapt to a fast changing external environment.
“We have also instituted a group wide employee stock option programme that aims to further the long term retention of key talent and making them partners in the value creation process. The stock options we give will vest after three years. However employees can encash in a staggered manner over the next three-year period at the earliest. The overall ESOP programme runs for 10 years which allows employees the flexibility to encash their ESOPs effectively between years three to ten since vesting,” said Malia.
The group has a wide spread of businesses with several major ventures being unlisted. These include its global steel business, its projects and realty businesses. Other unlisted ventures include publishing and agri business. It’s IT and BPO business is partly listed while it’s shipping, ports and oil refining and marketing business is listed on the BSE in India. Essar Energy which controls oil and gas exploration blocks, a power generation venture and the Indian oil refining business is listed on the London Stock Exchange.
“For the unlisted businesses, we have three methods of valuing the stake by an independent third party. We look at the net present value of future expected cash flows, the sum of parts methodology to value the business or the PE multiple of similar listed businesses. In unlisted businesses we give stock appreciation rights,” said Malia.
Stock appreciation rights (SARs) are bonus plans that grant not stock but rather the right to receive an award based on the value of the company's stock. SARs typically provide the employee with a cash or stock payment based on the increase in the value of a stated number of shares over a specific period of time. Employees may have flexibility in when to choose to exercise the SAR.
