Snapdeal has expanded the proportion of its equity to be distributed from 6% to 10%. This decision has not come just like that. Amidst the cut throat strategies between every ecommerce companies, the online marketplace, Snapdeal is keen to gain employee loyalty.
Amongst the 4000 employees, the company has selected one third of its workers i.e. 1200 as the top performers to be rewarded with stock options. As compared to last year, which were 300 top performers amongst 1200 employees, this year the company has increased the count.
HR Vice-president of Snapdeal, Saurabh Nigam commented, “Only the top performers have got stock options apart from the salary increments. We clearly want to share our success and recognise their role in the company’s journey.”
In order to provide the stock options Snapdeal has also changed its vesting cycle from yearly to quarterly basis.
An employee stock ownership plan (ESOP) is an employee-owner program that provides a company’s workforce with an ownership interest in the company. In an ESOP, companies provide their employees with stock ownership, often at no up-front cost to the employees. ESOP shares, however, are part of employees’ remuneration for work performed. Shares are allocated to employees and may be held in an ESOP trust until the employee retires or leaves the company. The shares are then sold.
Other ecommerce companies such as Flipkart, Pepperfry, UrbanLadder, Caratlane and others are also trying to woo their employees by issuing equity options. Besides ESOPs, startups are wooing top performers with rewards such as cash incentives and gifts like washing machines and bikes.
To take it positively, just yesterday, Housing’s CEO flattered his employees by allotting all of his personal shares of worth INR 150 Cr. and INR 200 Cr to all 2251 employees.
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