Prince163563 14 May 2023

Performance linked incentive not given by employer

I work in a Startup company. My CTC is 12 lac fixed and 2 lac of performance link pay (total 14 LPA).
I worked hard for a year and got an award. I was also promoted by my company for my good performance.
I was expecting that the company would pay me my performance link pay amount which was supposed to be paid after one year of completion. I need that money for paying my loans.

But the company has decided to convert performance link pay into ESOP (Employee Stock Option Plan).
The ESOPs will take one more year to get vested and I will have to stay in this company for one more year if I want to get the ESOPs.
In short, I will get ESOPs worth Rs. 2 lac after one more year instead of INR 2 lac immediately after one year of completion.

I have resigned from the company because of the toxic work culture and job insecurity so I will not be able to work for one more year for getting the ESOP. I am at a loss of Rs 2 lac.
My appointment letter didn't mention anything about the provision of ESOPs in lieu of a performance link pay amount.

Is there any way to get back my performance link pay of Rs 2 Lac?

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2 Replies

Dr J C Vashista (Advocate) 14 May 2023

Performance Linked Incentive by way of ESOP is given by companies to its employees to keep them motivated and retained as they form part of owners of the company which do not affect working capital or cash flow.

However, such option is rarely available in private sector to be given as cash incentive in lieu of ESOP. .

Moreover, such incentive can not be claimed by the employee.

T. Kalaiselvan, Advocate (Advocate) 15 May 2023

You can issue a legal notice to the company to settle the performance linked bonus which remains unpaid ever since you left the company.

You may quote the clause of the employment offer letter conditions which clearly entitles you for this type of bonus in your legal notice and instruct them to pay the same within 7 days from the date of receipt iof this notice failing which you can proceed with a suit for recovery.

The ESOP clause was not available in your employment offer letter hence you remain silent without making a mention about it in your demand notice.