Deepinder Goyal, founder and chief executive officer of foodtech company Zomato, has said that he will donate all proceeds of his recently vested employee stock option (ESOP) worth Rs 700 crore to Zomato Future Foundation.
According to an internal note sent by Goyal to Zomato’s employees, the Zomato Future Foundation will be covering education of up to two children of all Zomato delivery partners, up to Rs 50,000 per child per annum on actuals, above a certain service quality benchmark, who have been on Zomato’s fleet for more than five years.
The amount will go up to Rs 1,00,000 per child per annum if the delivery partner completes 10 years with Zomato, the letter added. It will also provide higher education scholarships over and above these limits for children with higher performance and potential.
According to the note, the foundation will accept donations from other Zomato employees and will look at other fundraising avenues. It also plans to set up an independent governance board for the foundation.
“..I do not intend to liquidate all these shares immediately, but over the next few years. For the first year, I will liquidate less than 10% of these ESOPs towards the foundation,” said Goyal in a statement.
It’s worth noting that Zomato had granted 36.8 crore ESOPs to Goyal in April 2021 and the company had incurred a net loss of Rs 360 crore in the first quarter of 2021 or the April-June period. While the company did not disclose the impact of the ESOP allotment on its losses during the period, a Bloomberg report highlighted that it was mainly due to the ESOPs issued to the founder.
Quoting data collated by Institutional Investors Advisory Services Ltd, the report also said that around 61% of Zomato’s institutional investors voted against the company’s ESOP Plan 2021 on September 18. However, 100% of public non-institutional shareholders voted in favour, and the resolution was passed.
