Paytm expands ESOP scheme to $604M
Paytm on Monday said it has expanded its employee stock option plan (ESOPs) pool to $604 million from around $33.4 million last year as it added more equity options to the existing pool.
As per the company's latest filings, it added 242,904 stock options to its existing pool, bringing the tally to around 2.4 million equity options. At present, the homegrown fintech giant is valued at over $16 billion.
Paytm said it will use the additional shares to give more employees stock options during the annual performance appraisal exercise, which most Indian firms will begin over the next couple of weeks and months as the new financial year sets in.
The Noida-based startup last year had announced an ESOP of Rs 250 crore (roughly around $33.4 million) linked to employees' performance.
"We consider our ESOP scheme as a great way to promote the spirit of wealth creation among employees, and truly believe that every employee is a stakeholder in the company," a Paytm spokesperson said in a press release.
PhonePe, Paytm's biggest competitor, in February, launched a $200 million stock option plan for its 2,200 full-time employees.
While most sectors languished last year due to the pandemic and the lockdowns that ensued, the fintech sector hits fresh highs in digital payments as more people shopped online and sought contactless payment options.
In the midst of job cuts, layoffs, and salary cuts by companies pressured by the COVID-19 pandemic last year, several Indian startups chose to go the ESOP route to retain top talent and offer incentives to senior executives in lieu of salary raises.
OYO, Zomato, and Grofers were some big names that also announced hefty employee stock ownership plans last year.
The stock options help keep employees entrenched in the betterment of the company, and give them a sense of belonging to the organisation, Paytm said last year when it announced its ESOP.
"If our employees have a feeling of ownership, they would be more motivated to align with the company's vision and give their 100 percent. We strongly believe that ESOPs should be given on the basis of the performance of an individual, and not considered a guaranteed perk or an add-on to the salary," the startup's Chief Human Resources Officer, Rohit Thakur, told YourStory in an interview.