Flipkart.com, the online retailer, has given its employees more than what they would have ever imagined. It has made some 400 employees who had stock options with the company a crorepati and that too in less than a year. This has all become possible because of the surging valuation of the ecommerce website.
“About 400 employees who own a stake have now become crorepatis” said a person to Economic Times who has a direct access to the information about the employee stock option scheme at the company.
Flipkart is now valued at $7 billion. All thanks to the $1 billion funding that it received last month. The company has around 7000 full time employees and out of them around one fourth own a stake in the online retailer.
Nearly 20 employees at the senior most level of the company who are holding important positions such as senior vice-president or above and joined the firm about two years ago have now hit the jackpot and become dollar millionaires. This means that their stock options are now worth at least six crores on paper. This wealth creation is the result of the firm’s market leader’s valuation jump.
The firm was valued at just $850 million in 2012 when it was successful in raising about $150 million.
From 2012 to 2014, the company’s valuation has seen an eight times increase. According to Sachin Bansal, co-founder of the online retailer, Esops was a conscious attempt from their side to create wealth for its employees. While the salaries being offered at the company are competitive, these Esops provides the employees with an opportunity for value and wealth creation. These can also be considered as a reward for those strong minded who believe in the future of the company.
According to Flipkart’s employees, Esops act as a motivation for them to work harder and better. It is how the company recognizes their work.
Ecommerce is soon catching up with the IT service industry as the top means of creating wealth for employees.
After the acquisition of Myntra by Flipkart in May, Myntra allowed the employees who had stake vested in the company and quit by the time of acquisition to sell their shares. Myntra, the Fashion e-tailer , provides Esops to all its core employees.
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