Digital payments and financial services company PhonePe said on November 19 that it would undertake employee stock options (ESOPs) buyback worth Rs 135 crore.
The Flipkart-owned company said that the buyback offer would follow a three-tier model based on seniority. The company’s founders Sameer Nigam, Rahul Chari and Burzin Engineer will not be participating in the buyback, so the Rs 135 crore pool will be fully reserved for employees.
The top leadership can sell up to 10 percent of their vested stock and all other current employees can sell up to 25 percent of their vested.
Manmeet Sandhu, Head of HR at PhonePe said, “Last December, we launched a new PhonePe ESOPs plan and issued ESOPs to 100 percent of our employees across levels, functions and grades. All these employees will complete the one-year cliff of their stock vesting next month, so it’s a great time to offer some liquidity to everyone.”
In December 2020, PhonePe launched its ESOPs program where it allotted ESOPs to all its 2,200 employees starting at a minimum of Rs 3.5 lakh, cumulatively worth Rs 1,500 crores.
“Almost 75 percent of our current workforce is eligible to participate in the current buyback offer, and for most it’s the first time in their careers that they’ve either owned ESOPs or had a chance to liquidate them,” Sandhu added.
PhonePe‘s announcement comes at a time when a slew of startups have announced ESOP buybacks for their employees. The number of companies announcing buybacks has picked pace since last year with startups like Acko, Cred, Swiggy, Zetwerk, Licious, Zerodha among others adding to the pool.
These buyback programs also help companies retain and attract talent at a time when tech hiring activity is at a never seen before peak and retaining employees in the current market scenario is turning out to be a difficult task.
The latest announcement had come from Kunal Shah-led CRED, on November 8, saying that its cumulative ESOP buyback for the year will be up to Rs 100 crore.
Food delivery platform Swiggy too rolled out a two-year ESOP liquidity program worth $35-40 million in October this year. Swiggy had said that all employees holding ESOPs would be eligible to participate in two liquidity events in 2022 and 2023.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
