Udaan issues Esops to all staff, employees can vest stocks every quarter now

All future Esop allocations at Udaan will vest every quarter, the company said. The one-year ‘cliff’ period is a common practice among many startups where they have to wait a minimum of one year before Esops can be vested.

After this, Udaan’s total number of Esop holders in the company has increased by four times and now covers 100% of its employees, the company said. It has around 4,600 employees. Last year, PhonePe also announced that it had allotted Esops to all its employees.

Esops are typically given to staff as an incentive to encourage them which could lead to wealth creation. Last year, several top tier startups like
Swiggy,
PhonePe,
Flipkart,
Licious,
Meesho and others bought back Esops from their staff.

“People trust companies with their careers. We felt that the practice of granting Esops with a one-year cliff doesn’t reciprocate this trust,” said Meenakshi Priyam, group CHRO, Udaan. “As a progressive employer, we have decided to take the lead in balancing the scales in employer-employee relationships in the industry and revamped our Esop policy. We want to treat all our employees as responsible adults and as equal partners.”

On January 5,
Udaan closed a $200 million debt financing through convertible notes to primarily five new investors. These notes can be converted into equity shares later, potentially before its initial public offering.

Discover the stories of your interest