The new business class includes employees who have recently acquired significant ESOPs from Nike, Somato, Polysibazar and Paytm, as well as private companies such as the Flipkart Group, Ola and Baijus. The ESOPs, also known as the Employees Stock Ownership Plan, are employee benefits that give ownership to the company. Employees will be given shares of the company at a reduced rate. Such ESOPs are often offered to raise funds and retain employees who are interested in management.
This year, a record $ 36 billion has been invested in Indian startups. This has increased the importance of ESOPs as well. The number of millionaire employees is projected to rise to 100 by the end of next year. Demand for this specialty has grown significantly as a result of recent corporate scandals. Previously, employees were reluctant to accept ESOPs. In the current context, ESOPs are likely to emerge as a factor in interviews and compensation. The fact is that the concept of dead money (inanimate) is no longer claimed by ESOPs. This is the main reason for the increase in importance.
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Many companies require ESOP from their employees. The shares are being repurchased. According to the Economic Times, 40 startups recently bought back shares worth Rs 3,200 crore from their employees. Harshil Mathur, co-founder and CEO of RacePay, told the Economic Times that employees should not rush to sell their holdings but should try to hold on to them. Payment company RacerPay does at least one buyback a year. In March 2021, the company repurchased $ 10 million worth of shares.
Many companies have in the past offered ESOPs in lieu of pay rises. The realization that a pay rise is not enough to have a significant impact on lifestyle is likely to attract employees to ESOPs in the future. PhonePay 2020 had provided ESOPs worth Rs 1,500 crore to employees. The minimum package was Rs 3.5 lakh. In addition to PhonePay and RazorPay, companies such as Udon, Flipkart Group, Upgrade, Swiggy and Spoiny have also joined ESOP this year. Bought back.
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