Honasa Consumer Pvt. Ltd. (HCPL), parent of Mamaearth and The Derma Co, announced an employee stock option plan (ESOPs) worth Rs 20 crore (around $2.6 million) for all their employees, the company said in a statement on Tuesday.
The company aims to ensure all employees, irrespective of their role, seniority and time spent in the organization have a stake in the firm, along with all current employees, it will provide the stock appreciation rights to all the future employees joining the organisation going forward, the statement said.
“Honasa Consumer Pvt. Ltd. has experienced meteoric growth over the last five years, and we wanted our team to grow along with the company. Unlike some programmes which require employees to contribute a part of their CTC (cost to company) as an investment towards stock options, we have made this as a top-up component, beyond the CTC,” said Varun Alagh, Co-founder and CEO of Honasa Consumer Pvt. Ltd.
“We want the employees to have an equal chance to participate in any upcoming liquidation opportunity to build their wealth portfolio,” he added.
The startup was founded in 2016 by husband-wife duo Varun and Ghazal Alagh. Its portfolio includes body lotions, rash creams, shampoos, body wash, massage oils and baby care products.
Over the last few weeks, several venture capital-backed startups including Walmart-owned digital payments platform PhonePe; edtech start-up Teachmint Technologies Pvt Ltd; FMO-backed fintech firm Innoviti Payment Solutions; social ecommerce platform Meesho and PB Fintech Ltd, the owner of online platform Policybazaar and Paisabazaar, among others.
ESOPs are usually allocated to qualifying employees of the company at the time of hiring, during appraisals or at the time of reward programme announcements. They have a vesting period during which employees cannot sell their holdings. However, once the vesting period is over, the company may facilitate a buyback option or the employees may choose to sell their shares as part of the secondary offering during the time of a fundraising exercise in the company to liquidate their holdings.