Meesho, a social ecommerce platform operated by Fashnear Technologies, has introduced its third ESOP employee stock ownership plan (ESOP) this year with an annual MeeSOP programme for all its employees.
“Under the program, every full-time employee, irrespective of their tenure in the company or their seniority will be able to convert a maximum of 25% of their annual CTC (cost-to-company) into ESOPs, subject to a minimum of Rs 50,000. ESOPs thus granted, would be greater than 100% of the CTC relinquished,” Meesho said in a statement.
The unicorn claims that unlike traditional ESOP plans - the MeeSOP programme is inclusive, allowing every employee, irrespective of seniority, to benefit from Meesho’s rapid growth while ensuring 100% of the grant is vested by the end of one year.
This is the third such announcement by Meesho following October's $5.5 million (around Rs 40 crore) ESOP programme to buy back the vested stocks from eligible current and former employees. In September, the company raised $550 million with its valuation soaring over 2x to $4.9 billion in Series F funding round.
“Our repeated and periodic buybacks ensure our employees continue to grow with us. The MeeSOP program takes this commitment further, breaking hierarchies to make every employee an owner, and providing more avenues for wealth creation and tax savings. As we hire more talent, we will continue to provide our team with the means to realise their personal and financial goals with us,” said Vidit Aatrey, Founder and CEO, Meesho.
Firms typically offer ESOPs to attract and retain talent. In some cases, it is estimated that ESOPs make up as much as 60-70% of the compensation package for top-level executives.
This year has seen many companies allow their staff to employee stock ownership plan (ESOP) liquidity events.
On Friday, Walmart-owned digital payments platform PhonePe also announced a buyback plan for nearly 75% of the employees on stock options that were issued last December 2020. In August, Bengaluru-based health and fitness platform HealthifyMe announced Rs 90 crore ($12 million) liquidity to almost 100 current and former team members.
Many other tech-focused companies like Locus, Moglix, Flipkart, upGrad, Whatfi, and Unacademy have also introduced liquidity events this year.
Meesho believes this provides both “opportunities and control to opting employees and helps them cash in on Meesho’s frequent ESOP liquidation programs”.
The internet commerce firm claims to offer ESOPs at negligible strike prices, monthly vesting after the first 12 months, and non-cancellation of vested stocks even post-separation.
