Zomato Limited has approved the allocation of 4,07,39,453 stock options to its employees, marking a strategic move to enhance employee incentives and strengthen retention efforts.
The decision, approved by the Nomination and Remuneration Committee (“NRC”) through a circular resolution on July 11, 2024, encompasses two key employee stock option plans (ESOPs): the Foodie Bay Employee Stock Option Plan 2014 (“ESOP 2014”) and the Zomato Employee Stock Option Plan 2021 (“ESOP 2021”).
Under these plans, 123 stock options have been granted under ESOP 2014, while a significant 40,739,330 options have been allotted under ESOP 2021.
Each of these options entitles the holder to convert it into one fully paid equity share with a face value of ₹1.
In total, these grants cover 4,15,63,430 equity shares, factoring in adjustments due to corporate actions.
The exercise price for these stock options has been fixed at ₹1 per option, allowing employees the flexibility to exercise them within 10 years from the date of vesting or 12 years from the date of listing, whichever is later, as per the terms laid out in the ESOP schemes.
At end of the day, Zomato Ltd shares were priced at 222.45 INR, up by 5.25 (2.42%). Based on this price, the approved stock options are worth nearly ₹906 crore.
This strategic move by Zomato underscores its commitment to aligning employee interests with long-term business goals, particularly crucial in retaining talent amidst competitive pressures within the foodtech sector.
The move also aligns with its recent shareholder approval to introduce the Zomato ESOP 2024, aimed at granting 18.26 crore additional employee stock options.
Zomato’s ESOP initiatives highlight a broader trend in corporate India towards enhancing employee benefits and engagement.
Earlier, major Indian firms, including Delhivery, Nykaa, Paytm, PB Fintech, and Tracxn, have also allocated ESOPs to strengthen their workforce.
In financial performance, Zomato reported a robust 26% quarter-on-quarter increase in consolidated net profit to INR 175 crore in Q4 FY24, up from INR 138 crore in the preceding quarter.
