More than 25,000 Flipkart employees, both current and former, are set to benefit financially as the e-commerce giant prepares to award a whopping $700 million in one-time cash payouts to holders of employee stock options.
Out of the total number of people eligible for the payout, 14,000, or 70 per cent of Flipkart’s 20,000-person workforce, remain on the company’s payroll. Former employees who own PhonePe stock will also be eligible for the payout, according to the sources, without specifying how many former employees will be eligible.
“We are pleased to announce that employees who are holders of Flipkart ESOPs (employee stock option plans) will receive a one-time discretionary cash payout as part of the transaction. “This payout represents the value of the PhonePe holding within those Flipkart options,” said Kalyan Krishnamurthy, CEO of PhonePe, in an internal email.
The email added that the payout will be worth $43.67 per option, taking into account the rise in PhonePe’s valuation.
“The new share price of Flipkart has been determined at $165.83 per option (previously $189.1), excluding the value of PhonePe,” Krishnamurthy added. Reflecting the increase in the market valuation of PhonePe, the payout to employees will, however, be $43.67 per option, Krishnamurthy said in the email.
After acquiring Flipkart’s ownership, Walmart is the largest shareholder in PhonePe. Following the completion of its domicile relocation from Singapore in October, PhonePe is now a fully India-based company.
The separation of PhonePe was announced as the company gears up for its plans to go public once its core businesses turn profitable, which the firm hopes to achieve by 2023.
During the fiscal year ended March 31, 2022, PhonePe’s consolidated operating revenue more than doubled to Rs 1,646 crore. However, the company’s loss increased to Rs 2,014 crore from Rs 1,728 crore in the previous fiscal year.
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