Walmart-owned e-commerce major Flipkart has completed an employee stock ownership plan (ESOP) buy back worth $50 million (around Rs 430 crore) from over 7,000 current employees, sources told Moneycontrol.
The $50 million buy back represents around 5% from the ESOP pool.
Additionally, Flipkart’s chief Kalyan Krishnamurthy, in an internal email, has told staffers that the company will unlock another 5 percent liquidity event around early next year, when it achieves certain key milestones, which could potentially lead to another $50 million in the hands of current employees.
The ESOP liquidity event comes at a time when a growing list of companies such as Blinkit, Swiggy, Zepto and several others are poaching from Flipkart.
“Let's always remember that in an industry as dynamic and competitive as ours, past successes are a foundation for future achievements. The opportunities in our country are immense. We must seize them, with agility and a shared commitment to success, forging meaningful growth for all,” Krishnamurthy said in his email, which Moneycontrol has reviewed.
While the mail did not shed light on the specifics of what the goals are, Moneycontrol had earlier reported that Walmart, and other board members of Flipkart, had mandated CEO Krishnamurthy to slash monthly cash burn by half, effectively asking him to bring it down from $40 million to $20 million.
"Looking ahead, we remain committed to acknowledging your contributions and if we achieve key goals committed to the Board by the end of the year, we will unlock another 5% ESOP Liquidity event early next year," the mail added.
To be sure, the liquidity event is only for current employees and is for 5 percent of stocks vested between July 6, 2022 and July 5, 2025.
For instance, if someone has 100,000 vested stocks overall, but stocks vested between this time frame of three years could be around 50,000, only 5 percent of the 50,000 shares, for current employees, on roll today will be eligible.
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