E-commerce giant Flipkart, owned by Walmart, is set to distribute ESOPs worth $700 million to 19,000 employees, marking a significant instance of wealth creation at the company.
Flipkart plans to repurchase employee stock options (ESOPs) as part of its strategy to establish full ownership of payments and financial services unicorn, PhonePe, reported Moneycontrol on Friday. The move aims to attract and retain talent amidst a challenging funding climate that has led many startups to implement layoffs.
Former employees and others have already received their payouts, with each share valued at approximately $43. Flipkart intends to prioritise and reward long-serving employees rather than solely focusing on senior management. The entire $700 million is expected to be disbursed within this month.
In an internal email reviewed by Moneycontrol, Flipkart CEO Kalyan Krishnamurthy expressed his delight in announcing the compensation distribution and thanked the team for their dedicated efforts.
"I want to thank all the teams for their consistent and dedicated efforts in prioritizing impact and value. It is your commitment to our purpose that continues to drive success for Flipkart," Krishnamurthy said.
"We have exciting times ahead, and as we continue to grow across businesses, I look forward to your continued dedication and determination to bring about the future that we envision and scale new heights together," Krishnamurthy added.
Last month, Walmart, the parent company of Flipkart and PhonePe, expressed confidence that both platforms could evolve into $100-billion businesses, driven by strong growth. The Flipkart Board of Directors had previously announced the separation of the PhonePe business, leading to the decision to compensate eligible stakeholders with $43.67 per vested option.
Overall, Flipkart's distribution of $700 million to employees underscores its commitment to recognising and rewarding the contributions of its workforce, as the company forges ahead in its expansion across various business sectors.