Flipkart employees are in for a rich harvest from their stock options weeks after Walmart completed its $16-billion investment in the ecommerce company. Flipkart has announced in a letter to current employees that they will be allowed to liquidate their employee stock ownership plans (ESOPs) at $126-128 a unit, depending on the charges applicable.
Walmart is obligated to purchase 6,242,271 shares from Flipkart’s ESOP pool of 11,947,026 shares, according to a recent filing by the global retail giant with the US Securities and Exchange Commission.
In effect, Walmart will purchase from Flipkart employees ESOPs worth nearly $800 million. The worth of Flipkart’s total Esop is about $1.5 billion based on the per-share purchase price. “The ESOP repurchase programme, a yardstick for the industry, is part of our continuing efforts to thank and reward our employees for their service,” a spokesperson for Flipkart said in an emailed statement.
ET reported on September 8 that Walmart was likely to buy shares worth $800 million from Flipkart employees.
However, employees currently working with the online retailer will be allowed to liquidate 50% of their vested ESOPs following the close of the Walmart-Flipkart transaction, another 25% at the end of one year following the first liquidation, and the remaining 25% at the end of two years following the first liquidation.
In December, Flipkart bought back ESOPs worth over $100 million from more than 3,000 current and former employees of the online retailer, its fashion arms Myntra and Jabong, and its payments arm PhonePe.