Fintech giant, Paytm has recently bolstered its Employee Stock Option Plan (ESOP) by allotting 1,10,357 equity shares to eligible employees. This strategic move aims to motivate and retain top talent in the face of a challenging financial environment.
The allotment has been approved by Paytm’s Nomination and Remuneration Committee on 5 August, 2024, under its Employee Stock Option Scheme 2019. Each share, with a face value of Re 1, was issued as fully paid-up, increasing the company’s issued, subscribed and paid-up equity shares to 636,384,447 from 636,274,090.
This latest allotment follows a series of similar grants under the same ESOP scheme. Earlier, in June, Paytm issued 6,000 shares, while in July, it granted an additional 2,81,394 shares. Earlier in May, the company had issued 87,373 stock options. Overall, in 2023, Paytm allocated an additional 1.7 million stock options to its employees.
ESOPs serve as a tool for companies to attract and retain talent by offering employees a stake in the company’s success. These options typically vest over time, aligning employees’ interests with long-term company performance. Despite this, Paytm has faced challenges, including workforce reductions of 15-20 per cent and allegations of unlawful terminations.
The expansion of the ESOP pool comes amid significant regulatory and financial developments for Paytm. The company recently received government approval to invest INR 50 crore in its payments arm, Paytm Payment Services, enabling it to apply for an online payment aggregator (PA) license from the Reserve Bank of India.
Paytm received an administrative warning from SEBI regarding related party transactions with Paytm Payments Bank (PPBL) conducted without proper approvals.
