New CXO hires at startups keen to ride Esop wave

An aspirant to a leadership-level job at newly minted unicorn Droom told his interviewer, chief executive Sandeep Aggarwal, that he was willing to take up to a 50% cut in cash compensation for a bigger chunk of employee stock options (ESOP), assured that such a package promises both bigger future upside and sufficient near-term liquidity.

Similarly, a CXO-level hire at a fintech opted for a compensation structure tilted rather heavily toward Esops instead of cash when given a range to choose between the two.

Esops are now much more than the proverbial flavour of the season in startup India, with equity getting a disproportionate share in compensation packages built for top roles – especially in the aftermath of
Zomato’s blockbuster listing last week.

Several factors besides the recent listing of the food services platform are at work, although the likelihood of immediate initial public offerings (IPO) by startups is the biggest draw-card.
Paytm,
Nykaa and
Policybazaar are among the bulge-bracket startups headed for their trysts with destiny on D-Street while a number of others including Razorpay and Wakefit have
launched Esop buyback plans, fuelling a renewed interest in these instruments that seemed to have lost their lustre over the past few years.

Headhunters and startup bosses say executives are negotiating hard to bump up the Esop components in their pay.

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Startups have an Esops fable to tell