Online retailer Flipkart has sold a marginal stake worth between Rs 180 crore and Rs 240 crore ($28-36 million) from its employee stock option (ESOP) trust fund to wealthy individuals in the first such transaction aimed at retaining talent.
The Economic Times first reported the transaction on Monday citing unidentified people aware of the development.
When contacted by Techcircle.in, a spokesperson for Flipkart said only that the employee trust is a structure to facilitate liquidity among employees at all levels depending on the amount of vested options. "This is a repeatable structure and we do intend to use it as we go along at least on an annual basis," the spokesperson said.
Flipkart declined to comment on queries regarding the size of the trust fund and the modalities of the employee inclusion policy for its ESOP plan.
The move highlights the growing importance of retaining talent in the rapidly expanding e-tail sector. The sale of stake from the trust would enable Flipkart employees to monetise the company shares they hold as part of their compensation package without waiting for the completion of a minimum lock-in maturity period. The move is all the more significant considering that Flipkart is an unlisted company.
E-commerce companies often offer ESOPs to employees in a bid to attract and retain talent. Snapdeal, ShopClues and Infibeam are the other e-tailers that offer ESOPs. The ESOPs could make up as much as 70 per cent of the compensation package for top-level executives.
Flipkart has been on a top-level recruitment spree, a sign of the intense competition that is brewing among India's top e-tailers. Last month, the company named Samardeep Subandh its marketing chief in the latest top-level appointment.
Earlier, it appointed Amazon's Dan Rawson as head of customer logistics and supply chain ecosystems, Google's Ravi Byakod as director of engineering â€“ accounting, and Microsoft's Anand Lakshminarayanan as head of product management for digital goods and services. Besides, Punit Soni joined as chief product officer in March from Google and Peeyush Ranjan, another Google employee, joined as head of engineering.
Flipkart has also seen a number of senior-level exits recently. Chief people officer Mekin Maheshwari moved to an advisory role while Ravi Vora, who was CEO of Flipkart's Strategic Brands Group, exited the company in September.
In August, the CEOs of Appiterate and AdIQuity, startups acquired by Flipkart earlier this year, moved on from the company. Prior to that, Amod Malviya, chief technology officer at Flipkart, stepped down to be a part of the company's advisory board.