Published By : 10 May 2018 | Published By : QYRESEARCH
Employees of Indian ecommerce giant Flipkart that has just been acquired by global giant Walmart are in for a pleasant surprise. With around US$500 million earmarked towards liquidity of employee stocks, it is set to create one of the biggest pools of wealth for employees.
Walmart will acquire Flipkart at nearly US$21 billion. This deal has upped the total worth of each employee’s ownership plans, including unvested shares to around US$2 billion, says a source. The estimated employee stock ownership plan (esop) now stands at around US$1 million.
Walmart to Buyback Entire Vested Shares
Walmart is expected to provide an opportunity to buy back the entire of the vested shares. The stock options of Flipkart are offered over a period of four years, with employees given to vest them every month post an year.
Currently, stock option pool of employee at Flipkart is almost the combined pool of Esop of HCL Tech worth Rs.5, 498 crore, Axis Bank worth Rs.5,065 crore, and Wipro worth Rs.3040 crore, calculated on the basis of stock prices of these companies.
So far, Indian IT behemoth Infosys has created maximum wealth for its employees. It created Rs.50, 000 crore of stock options for its staff from its establishment to 2011. In 2000, the company offered Esops to over 2,000 employees, turning many of them into millionaires.
However, for Flipkart this is not a first. In December last year, it provided liquidity to employees through its Esop repurchase plan of about $100 million. This was the most prominent such buyback by a private entity in India.