OYO has decided to offer a deeply discounted employee stock ownership plan (ESOP), which will make each and every employee a shareholder in the company, the hotel and hospitality unicorn’s spokesperson has confirmed.
“We have offered all our employees deeply discounted ESOPs comparable to restricted stock units and henceforth called RSUs. This means all OYOprenuers have been enabled to buy the stock of the company at a deeply discounted pre-determined price of value (referred to as “RSUs”) subject to the necessary corporate approvals,” OYO spokesperson said.
The company has also specified that the “deeply discounted ESOPs (RSU comparable hereby referred to as RSU)” will also be available to the employees on “leave with limited benefits”. OYO’s chief human resources officer Dinesh Ramamurthi had informed the employees about this development earlier this week.
One of the employees, who sought anonymity, told Mint that these RSUs were granted on June 1, 2020, and can be vested only after a year from the date of grant. This means that employees need to be active in the company until June 1, 2021 to exercise this option. The price per RSU is currently decided on INR 10 per option.
In the two months of Covid-19 resultant lockdown in India, OYO’s Hotels and Homes business was severely affected. The company’s founder and CEO Ritesh Agarwal had come on record to confirm OYO’s occupancy rate and revenues have dropped by more than 50 to 60% and the company’s balance sheet has come under severe stress. All this led to furloughs, 25% salary deductions and layoffs in OYO across 80 countries.
Inc42 had verified the email written to employees by OYO India and South Asia CEO Rohit Kapoor which said deductions will be effective for April-July 2020 payroll. Kapoor wrote that all other benefits will remain unchanged and it will be ensured that no employee gets less than INR 5 Lakh per annum after deductions, claiming that a “large percentage” of employees at a lower pay scale will see no impact.
However, the company has been pushing for ESOPs in order to compensate the employees’ efforts. According to the Ministry of Corporate Affairs filings accessed by Inc42, the company in a meeting on February 17, 2020, increased the ESOP pool to 8720, from 6720 under the ESOP plan 2018, in light of the National Company Law Tribunal order when OYO demerged its businesses, under which 6720 shares were converted into Oravel Employee Welfare Trust.
Several other companies have also distributed ESOPs to its employees in the light of Covid-19 crisis that has resulted in layoffs and furloughs for them as well. Bengaluru-based digital payments solutions startup Innoviti has enhanced its ESOP pool to $10 Mn, while Grofers has almost doubled its ESOP pool to over 11%, up from 6% in late 2018. Zomato too has decided to offer ESOPs to its employees.
Meanwhile, just like other years Paytm is rewarding high-performing employees and new hires with employee stock option plans (ESOPs) worth INR 250 Cr.