Ecommerce giant Flipkart pays out $700 million to employees

Indian ecommerce giant Flipkart said it has paid nearly $700 million as part of the one-time payout for the Employee Stock Ownership Plan (ESOP) from the separation of PhonePe and Flipkart.

With this, the company ends the process that started with the separation of the two firms in December 2022.

The company, however, didn't disclose the value of the payment, reportedly, the payout has benefited a total of 24,000 individuals, both current and former employees, who were deemed eligible for this payout.

In an email distributed to Flipkart employees, the company explained, "The Board of Directors (BoD) of Flipkart Private Limited announced the complete separation of the PhonePe business by selling off its entire shareholding in December 2022. Following this decision, the BoD approved a payout of $43.67 per Employee Stock Option Plan (ESOP) for vested options of eligible current and former stakeholders, as of the record date of December 23, 2022."

Flipkart had previously indicated in December 2022 that a "one-time discretionary payout" would be provided to employees following the separation of PhonePe. This compensation mirrors the value derived from PhonePe in Flipkart shares.

This payout has resulted from the company's vesting schedule, which distributes 25% of the allotted shares to employees each year over four years. According to market research and data platform Tracxn, as of May 2022, Flipkart has set aside 4.58% of its shares as part of the ESOP pool.

Simultaneously, PhonePe transitioned into an India-domiciled company, a step viewed as a precursor to its forthcoming domestic public listing.

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