Faith in Employee Stock Options (ESOPs) has increased with many companies allowing employees to divest their part of holding in secondary transactions. BYJU’s, Unacademy, Rivigo, CarDekho, Paytm, Razorpay, Meesho , Zerodha and Bounce among many others had made their employees richer in the past 10-12 months.
Ola was one of the early companies to facilitate exit to ESOPs holders in 2018. Now, the company has expanded its ESOPs pool by adding Rs 326.45 crore ($46 million). According to regulatory filings, the company passed a special resolution to increase its ESOP pool by a further of 153,623 equity shares.
It’s worth noting that Ola allotted shares to Hyundai and Kia at Rs 21,250 per share in November last year, making the newly added shares to be worth around Rs 326.45 crore.
With the addition of stock to the ESOP pool, Ola joins the league of Unacademy, Byju’s, Zerodha, Bounce and Paytm who expanded their ESOP allocation in the past six months. To ease out ESOPs encashment, the government had recently mentioned in the budget about deferred tax payment on employee stock ownership plans.
The government had deferred tax payment on ESOPs by five years or till they (employees) leave the company or when they sell their shares, whichever is earliest. The decision further invigorates the trust of employees in stock option as they prefer joining startups over corporates with the hope that it will pay off big eventually.
Expanding the ESOP pool is a good sign for Ola that has been ramping up a plan to go public in the next 18 months. To reduce burn and weed out inefficiencies, the company also laid off over 1,000 employees recently. It’s also facing exodus at the top level. After the departure of many top-level employees, Naroo Krishnan, head of products at Ola Mobility and Sanjay Kharb also moved from the company last month.