Flipkart has announced a one-time cash payout for its employees through a $700 million employee stock option (ESOP) buyback programme. This initiative comes as Flipkart separates from its payments subsidiary, PhonePe, a move which took place in December 2022. The payout is intended to compensate for the loss of PhonePe’s value in the stock option. The disbursement of these payouts is scheduled to take place by July 31.
As per reports in the Economic Times, Flipkart employees, both current and former, who meet the eligibility criteria, will receive around Rs 3,615 for every unit of ESOP they own in the company. It’s important to note that the payout amount is subject to withholding taxes and other tax regulations applicable in the countries where the ESOP holders reside. Flipkart is currently finalising the necessary legal requirements to facilitate the payout process.
This cash payout from the ESOP buyback is expected to benefit around 25,000 present and past employees of Flipkart, making it one of the most significant instances of wealth redistribution in the Indian startup ecosystem.
The buyback is part of a broader fundraising endeavour by PhonePe, which aims to secure $1.5-2 billion in a funding round led by Flipkart and its primary shareholder, Walmart, the US retail giant.
As of now, PhonePe has raised approximately $850 million, with significant contributions from General Atlantic, a private equity firm, totaling nearly $550 million. This investment has valued PhonePe at $12 billion, highlighting its success in the digital payments sector.
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