Swiggy, the popular food and grocery delivery platform, has made headlines by granting a substantial amount of employee stock options (Esops) to its founder, Sriharsha Majety, and other key executives.
As the company gears up for its initial public offering (IPO), this move reflects its commitment to rewarding and retaining top talent.
Swiggy ESOPs: Key Details
Swiggy has allocated a whopping $271 million worth of Esops to its leadership team. This move is part of the company’s stock-based compensation plan rolled out in April 2024.
Among the beneficiaries, Sriharsha Majety, the founder and group CEO, stands out. He is set to receive Esops worth $200 million.
Additionally, other top executives, including the company’s co-founders Nandan Reddy and Phani Kishan Addepalli, CFO Rahul Bothra, CTO Madhusudhan Rao, and food marketplace CEO Rohit Kapoor, will also benefit from this scheme.
The Esop 2024 scheme comes with a vesting period ranging from one to eight years from the date of the grant. This ensures that recipients remain committed to the company’s long-term success.
Implications and Analysis
Swiggy’s decision to grant substantial Esops underscores its confidence in its future growth trajectory.
By incentivizing key personnel, the company aims to align their interests with those of shareholders. Their vision is to create a strong sense of ownership.
Sriharsha Majety already holds a 6.23% stake in the company. These additional Esops could result in an additional stake of 2.2-2.5%.
Notably, he plans to sell a stake worth $7.5 million through the IPO’s offer for sale (OFS) component.
In 2021, Swiggy’s chief rival Zomato awarded its founder and CEO Deepinder Goyal with stock-based compensation. This was worth nearly $376 million at the time.
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