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Employees of ecommerce platform Flipkart are set to receive a cumulative payout of $700 million employee stock option plan (ESOP) buyback. According to an ET report, Flipkart is facilitating the buyback as part of its separation from the fintech giant PhonePe later this month, adding that the payouts for the ESOP buyback will be made by July 31 and the communication regarding the same was made to the employees previously.
The report further added that Flipkart will be offering current and former employees a one-time payout to account for PhonePe’s value in Flipkart’s shares. More than 24,000 former and current employees at Flipkart and Myntra stand to benefit from this.
In an email sent to its employees, Flipkart said the payout will be $43.67 per vested option. For current employees at Flipkart, the payout will take into account the total number of vested and unvested granted options. The compensation is expected to be paid out on or before July 31, according to media reports.
Further, current employees will also get benefits based on their unvested options, the internal note reportedly said.
To be sure, the payouts to each employee will still be subject to applicable withholding taxes and other tax rules in the respective countries of ESOP holders. According to the note cited by ET, added that legal formalities for the payout are currently underway.
Reportedly, the ESOP buyback will see Flipkart’s valuation drop to $33 billion from the $37.6 billion it commanded during its last funding round in 2021. The company was valued at $12 billion as of February 2023, according to market research and data platform Tracxn.
Flipkart acquired payments company PhonePe in 2016 for $20 million. During th time of seperation from PhoePe, Flipkart had said in a statement that “The board has taken the decision to allow PhonePe to access dedicated capital to fund its long-term ambitions over the next three to four years. In line with this, the 5-year-old startup will raise $700 million in primary capital, in a round led by Walmart along with participation from some existing investors.”
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