A month after PhonePe the fintech giant was partially spun off from Flipkart, it allotted stock options worth $200 million to its 2,200 employees.
In December, Flipkart had announced the partial spin-off of PhonePe, as the digital payment firm had raised $700 million in funding, valuing it at $5.5 billion.
At that time, Flipkart had said the spin-off would offer PhonePe an opportunity to create a tailor-made equity incentive or ESOP programme for its employees.
PhonePe HR Head Manmeet Sandhu said in a blogpost, that, “In January 2021, we launched the PhonePe Stock Option Plan that gives every PhonePe employee the chance to own a part of the company. The $200 Mn plan allotted stock options to all 2,200 employees at PhonePe, enabling everyone in the organisation to benefit from its success.”
The PhonePe stock option plan is a core component of the company’s compensation philosophy “crafted to encourage collaboration, long term focus and organisation first thinking,” Sandhu added.
The company said it is committed to building an internal culture based on the inclusion and an abundance mentality and looking at removing the need for internal competition.
“Our compensation system aligns with this approach by removing variable pay based on individual performance for most roles. Instead, we use ESOPs to create the incentive for everyone to be invested in long-term organisational growth,” “by having ESOPs at a minimum of $5,000 for all levels, we enable every employee in the organisation to participate in the wealth generation opportunity…” the blog said.
As roles become more senior, ESOPs are part of the annual compensation for employees, translating into a larger component of their compensation is tied to the organisation’s success that encourages everyone to put the organisation first, it added.
PhonePe was founded by ex-Flipkart executives Nigam, Chari and Burzin Engineer, and was acquired by Flipkart in 2016. In 2018, Flipkart was acquired by Walmart, and PhonePe was also part of the transaction.
Post the transaction in December 2020, Flipkart owns 87% majority share in the hived-off entity with US-retail giant Walmart owning 10% and existing investors, including Tiger Global Management, holding the remaining 3%.