Astra executives offered stock ownership option

JAKARTA (JP): In a first for locally listed companies, leading Indonesian auto firm Astra International is offering high- achieving senior executives an option to buy company shares at discounted prices.

Astra's chief executive Rini M.S. Soewandi said on Tuesday that a stock option offer for high achievers would improve their sense of belonging to the company and therefore improve their dedication and eventually boost the company's performance.

She said the stock ownership option would be carried out over three years, starting this year with 32.4 million stocks on offer -- representing 1.3 percent of current outstanding shares.

The execution price for this year's stock option will be Rp 1,800 a piece, far cheaper than Tuesday's closing price of Rp 3,775.

Rini said the stock option directly benefited both the employees and the company. She said it served as an incentive for high achievers, and at the same time would have a positive impact on the company's cash flow.

"This stock ownership program has a medium and long-term objective, so that it will give greater benefits to the employees, and at the same time improve the company's performance in the long run," she said.

For the time being, the stock option will only be offered to employees from the managerial level up. The next program will also include high-achievers at the lower level.

Astra is the first publicly listed firm offering direct stock ownership to its employees.

In developed countries, stock ownership programs have become a common practice among listed firms. In the United States, for instance, more than 90 percent of public companies have offered stock options to their employees, compared to 80 percent in Britain and 50 percent in Hong Kong.(rid)