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Snapdeal crisis: Employees may lose wealth worth crores promised under ESOPs

ESOPs are benefit plans that are offered to employees in the form of stakes in the company that can be liquidated when the company goes for a buyback event

April 14, 2017 / 02:38 PM IST
An employee is seen at the front desk of Snapdeal headquarters in Gurugram on the outskirts of New Delhi, India, April 3, 2017. REUTERS/Adnan Abidi

An employee is seen at the front desk of Snapdeal headquarters in Gurugram on the outskirts of New Delhi, India, April 3, 2017. REUTERS/Adnan Abidi

Former senior employees of e-commerce firm Snapdeal who were lured through attractive employee stock option plans (ESOPs) are a worried lot these days.

Recently, founders, Kunal Bahl and Rohit Bansal in an e-mail, tried to assure the existing employees that the well-being of employees if their top and only priority. But, there is little clarity in terms of what happens to these employees or even the former employees ESOPs offered to them at the time of joining.

ESOPs are benefit plans that are offered to employees in the form of stakes in the company. Employees can liquidate their ESOPs when the company goes for a buyback event. Usually, it happens either when a company raises a funding round or when it goes for an initial public offering.

In the last couple of years, there have been multiple instances where ESOPs have been regarded to be game changers.