The ultimate truth of startup life when it concerns employee stock ownership plans (ESOPs) is that…they don’t matter much. IT services company Infosys and e-commerce giant Flipkart are regarded as “ESOP poster boys” in the industry. But no other company has come close to replacing them in the ESOP hall of fame.
Despite that, ESOPs have emerged as an unlikely tool of leverage among startups and unicorns after the onset of the Covid-19 pandemic. The likes of food delivery company Zomato, scooter rental startup Bounce, e-grocer Grofers, and budget hotel chain OYO are compensating their employees for pay cuts with ESOPs.