Flipkart to compensate employees after valuation drops in new funding

By

Maverick Martins

Published
Apr 13, 2017

India’s leading etailer Flipkart will offer eligible employees differential stock options under its employee stock option plan (ESOP) to protect them from the share price drop following its latest fund raise, according to a report in the Financial Express.

The mammoth $1.4-billion fund raise that was announced on Monday valued the company at $11.6 billion, down sharply from the $15.2 billion at which the e-tailer was valued in the previous fund raise in 2015.

Several thousand Flipkart employees receive stock options. How many of them would be eligible to receive the differential options is not clear. The employees most affected would be those that were issued shares following the $15.2 billion valuation.

As per the communication to the Flipkart group staff, the differential grant is being made available so that the total dollar value of options allotted to an employee remains unchanged. This will be applicable to all Flipkart group staff including Myntra and PhonePe who are under the employee stock option plan (ESOP).

"As an organisation, Flipkart takes immense pride in being the employer of choice for thousands of professionals – a vaulted status that only comes with a deep, company-wide sense of transparency and fairness. If Flipkart does well, so should you,” Binny Bansal, the group CEO, said in his communication to the staff.