In a move to reward employees, digital payments leader Paytm has expanded its employee stock ownership plan by allocating more than 2.8 lakh shares. As per an exchange filing, the Nomination and Remuneration Committee approved allotting 2,81,394 equity shares to eligible staff upon the exercise of vested stock options.
Most of these shares, around 2.78 lakh, were distributed under the company’s Employee Stock Option Scheme 2019. The remaining 2,536 shares were part of the older 2008 ESOP scheme. Based on Paytm’s last traded stock price, this fresh stock allotment is valued at over Rs 12.2 crores.
The latest stock issuance comes after Paytm handed out 87,373 options in May under its 2019 ESOP plan. Earlier in 2023, the company had designated an additional 17 lakh stock options for workers. This move underscores Paytm’s commitment to retain and attract top talent through ownership opportunities.
However, some see this as contradictory given reports the payments firm aims to cut its workforce by 15-20% through restructuring. Several employees have reportedly complained to labor authorities regarding “unlawful termination” without due compensation.
On the financial front, Paytm is braving challenges like a steep net loss tripling in Q4 2023-24 versus the prior year. Meanwhile, revenue declined by 2.9%. Internally, it is grappling with RBI’s halt of its bank operations from March 2024.
Externally, major investors like Goldman Sachs and Marshall Wace offloaded Paytm shares worth over Rs. 208 crores last month. Strategically, the company might divest its ticketing business to Zomato and withdrew an insurance license application. Only time will tell if these stock options can boost morale amid such turbulence.
