Zerodha, the Indian financial services company, has offered 77 per cent of its staff— which is about 850 of its 1100 strong workforce— an employee stock ownership plan (ESOP) worth more than Rs 200 crore.
The Company, which was founded almost a decade ago, as a partnership firm, recently became a public limited. Earlier, only a few of its executives or core team members held dummy shares. Once it became a public limited entity , it underwent restructuring, put in place a formal structure, and created an ESOP pool involving more employees.
The employees have been provided convenient liquidity options, and the Company has created a Rs 30-50 crore fund to enable buy back of shares next year, unlike the usual mandatory three to five year period.
In case of emergencies, the employees can also avail credit against these shares at an interest rate of six to seven percent a year.
The shares were allocated according to the employees’ gross income through their tenure. Most of the employees have been with the firm since its launch. Additional shares were allocated to employees on the basis of their individual productivity/performance.
The Company plans for public listing in the next four to five years. Whenever that happens, the employees will be able to trade in their shares at market value.