Lintas distributes net proceeds of IPG transaction to permanent employees

Lintas distributes net proceeds of IPG transaction to permanent employees

Author | Noor Fathima Warsia | Monday, Jul 23,2007 9:05 AM

Lintas distributes net proceeds of IPG transaction to permanent employees

It is celebration time for Lintas India employees. Following the closure of the Lintas India and IPG deal, wherein the latter has bought out Lintas India completely, the trustees of the Lintas Employee Welfare Trust have decided to distribute the entire net proceeds of the transaction between IPG and Lintas India, after payment of taxes and expenses, to all employees of Lintas India. Industry sources peg this as the largest employee payout deal in the Indian advertising industry.

Prem Mehta, Chairman, Lintas India, explained that once the decision was taken to distribute the proceeds after the payment of taxes and expenses, the trust had to develop an equitable basis for the distribution of the proceeds amongst its permanent employees, and decided to make the total contribution of the employee as the basis. The total contribution comprises two parameters – level of contribution and cumulative contribution in the past years.

The level of contribution was adjudged by the salary of the permanent employee, and the cumulative contribution was done on the number of years the employee has been in service at Lintas India. On the basis of this, the payout for every single permanent employee across levels, functions and units of Lintas India was made. Needless to say, Mehta didn’t divulge the figure distributed, citing company policies as the reason to refrain from quoting any figure.

Speaking on the reasons behind the decision to distribute the entire proceeds, Mehta said, “It was wealth created by the employees, and so the Trust decided to give it back to the employees.”

Now that the payout is over, one might speculate that some senior employees may take the exit route from the company. Mehta, however, has a different view on that. “The employees have spent time and energy with the company, and I would imagine that a payout like this would further renew the commitment to the company, and not end it,” he maintained.

The payout, and the sheer scale at which it has happened, wherein even a seven-month junior level employee has pocketed over Rs 1 lakh, and some at senior levels have been given cheques in figures of crores, has created quite a buzz in the industry.

Tags: e4m

Write A Comment