Employee Stock Option Programmes have recently brought in quite an impact owing to the latest IPOs and investment booms of rising companies. This hasn’t just changed the dynamics of the Indian economy but also created moneyed non-founder employees with significant stock option haul.
The industry witnesses around 35 non-founder executives who hold stock options which are worth over Rs 100 crores in recently listed and private companies. They own significant ESOPs in companies which have recently gotten listed on the stock market- Nykaa, PolicyBazaar, Paytm, Zomato as well as private compaies such as Ola and Byju’s.
The focus on employee stock option programmes has been turnaround since the inflow of investment in these start-ups has been huge. Known to provide an environment which is growth focused, they are very ardent in providing ESOPs to it’s employees and on multiple occasions also use it as a tactic to invite fresh talent into the organization.
Companies also initiate buybacks from their employees which result in a windfall for their employees. It allows employees to work on their investment knowing that the company is focused on not just it’s growth but also ensures that the employee grows with them. It adds in for a pool of wealth creation for it’s employees, contributing to the success of the company while building on the retirement savings which will far outdo the retirement plan options that the employee would otherwise have to exercise upon. Razorpay for instance initiates a buyback at least once a year. Udaan, UpGrad, Swiggy and the Flipkart Group have all initiated buybacks recently too.
An increase in the salary is not just the only criteria that an employee looks for in a promotion. A favorable lifestyle requires unconventional compensation structures and as a result, ESOPs are becoming increasingly popular in recent times. Gone are the days where individuals would only think of one source of income that would lead to the accumulation of their wealth. Much like their investment plans need to be diversified, their sources of income and holdings also need to be just as diverse. The holdings of these 35 employees, as per the Longhouse Consulting firm prove testament to it and we couldn’t agree more.
