NEW DELHI: Following the salary cuts which have been implemented across functions and putting some employees on a leave with limited benefits plan, SoftBank backed Oyo Hotels & Homes has sent off a letter to employees stating they have decided to make every employee a co-owner and shareholder of the company by granting them ‘deeply discounted ESOPS.’
People familiar with matters at the company said these letters have been sent to employees who have been put on a leave with limited benefits plan as well as others who continued to work.
In April, Oyo announced pay cuts and ‘leave with limited benefits’ options for its staff in India. In an email to employees, Oyo CEO Rohit Kapoor had then said the company is asking all its employees to accept a reduction in their fixed compensation by 25%, effective for the April-July 2020 payroll period. Kapoor had also said the company had to take the “hard decision” of placing some employees on leave with limited benefits from May 4 for four months until August 2020.
ET has seen a copy of some of these letters dated July 1, and signed by Oyo’s chief human resources officer Dinesh Ramamurthi. Oyo confirmed the developments.
“We have offered all our employees the deeply discounted ESOPs comparable to RSUs…This means all Oyopreneurs have been enabled to buy the stock of the company at a deeply discounted pre determined price of value and we are already seeking necessary corporate approvals,” an Oyo spokesperson said and added: “All 100% of RSUs would be vested at the end of one year from the date of the grant…Our efforts are in line to reward the employees for long term as they sacrificed their salaries to support the company during tough times.”
A letter sent to one of the junior most employees stated: “As part of the communication by Ritesh, we have decided to make every Oyopreneur a co owner and shareholder of the company. You are receiving deeply discounted ESOPS (comparable to RSUs and referred as the RSUs) meaning that an option is given enabling you to buy the stock of the company at a deeply discounted pre determined price. These RSUs will have a strike price of Rs 10 per option. As part of the commitment, vesting would continue even if you leave your employment with Oyo which enables you to become a co owner.”
It also stated the programme is subject to board and shareholder’s approval as required under ESOP 2018 and under applicable laws. ‘This step is unprecedented in the history of Oyo both in terms of number of people covered through grant of stock options and also the terms of ESOP 2018.”
The letter goes on to add that pursuant to ESOP 2018 and the applicable laws, the company may vary the terms of the ESOP 2018 in relation to the stock options granted to employees. The letters mention the value of reference share price for the grant as Rs 37,10,000. The date of 100% vesting of the RSUs is mentioned as one year from the date of the grant. The total value of RSUs granted to some of the employees range from over Rs 70,000 to about Rs 1.5 lakh. In June, through an internal email, founder Ritesh Agarwal had said the company was granting ESOPs worth Rs 130 crore to all its furloughed employees impacted by the pandemic. He had said in April that the company will place a certain number of employees on furloughs or temporary leaves globally.”
“This is an exercise in compensating all these employees on what they have lost due to Covid. The quantum of the grants and value of RSUs granted depends on how much salary employees lost,” a person familiar with the matter said.
ET had reported in its edition dated May 8 that startups such as Oyo, Zomato, Grofers and Bounce were expanding their ESOP pools and were offering additional stock options to employees in an attempt to retain them following the pay cuts.
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