Thread by @TheKenWeb

Today's story is about employee stock ownership plans, or ESOPs, which have failed to live up to expectations in India.

#Thread

For a good part of the last decade, ESOPs offered the promised land of riches. First Infosys, and then Flipkart set benchmarks. For listed and acquired companies.

But no other company has come close to replacing them in the ESOP hall of fame.

ESOPs have emerged as an unlikely tool of leverage among startups after the onset of #Covid19.

The likes of Zomato, Bounce, Grofers, and OYO are compensating their employees for pay cuts with ESOPs.

They’re also being used as a tool to acqui-hire companies on the cheap.

On average, India’s new economy companies have 5-10% of their equity locked in an ESOP pool. Now, that pool is, almost counterintuitively, set to grow.

It’s estimated the top 30 unicorns in India record close to $80 billion in valuation, 10-15% of which resides in ESOPs.

Employees, however, have not been able to realise these gains.

While the rekindled fire for ESOPs isn’t warming up employees, companies and investors see it differently.

Is it that straightforward? When most will not cross the #Covid19 chasm, let alone regain the old valuations.

Companies are also playing fast and loose with ESOP policies, going to the extent of even denying vested options.

In today's story, @tam_arund peeps inside what a VC called "a house of horrors".

For subscribers only:

the-ken.com/story/no-more-…