Deepinder Goyal to give up ₹1,000-crore Eternal ESOPs as he steps down as CEO: Report
In a significant development, billionaire Deepinder Goyal, the founder and CEO of Zomato parent company Eternal, is set to give up unvested ESOPs (Employee Stock Ownership Plans) worth a staggering ₹1,000 crore as he steps down from his role as CEO. This move is expected to have a significant impact on the company’s stock ownership structure and may potentially delay the need for further dilution of ESOPs.
According to a report by the Economic Times, Goyal’s decision to relinquish his unvested ESOPs will result in the return of 3.3 crore shares to the company’s pool. This is a substantial number, considering the total outstanding shares of the company. The report quotes Akshant Goyal, the company’s CFO, as saying, “Because [of this]…we may not need to dilute our ESOPs again for slightly longer.” This statement suggests that the company may not need to issue new ESOPs to employees in the near future, which could help maintain the current stock price and prevent dilution of existing shareholders’ ownership.
The decision by Deepinder Goyal to give up his ESOPs is seen as a significant gesture, considering the substantial value of the shares involved. ESOPs are a common practice in the startup world, where employees are granted stock options as part of their compensation package. These options vest over a period of time, allowing employees to purchase the company’s stock at a predetermined price. In Goyal’s case, the unvested ESOPs would have vested over time, allowing him to purchase the company’s stock at a discounted price.
The move by Goyal to relinquish his ESOPs is likely to be seen as a positive development for the company’s shareholders. By returning the shares to the company’s pool, Goyal is effectively reducing the number of outstanding shares, which could help increase the earnings per share (EPS) and potentially boost the stock price. Additionally, the decision may also help to alleviate concerns about the company’s stock ownership structure and the potential for further dilution of ESOPs.
The development comes at a time when Zomato, the food delivery and restaurant discovery platform, is looking to expand its operations and increase its market share. The company has been investing heavily in new initiatives, including its grocery delivery service, Zomato Market, and its dining-out platform, Zomato Pro. The company has also been focusing on improving its financial performance, with a emphasis on reducing losses and increasing revenue.
The decision by Deepinder Goyal to step down as CEO and give up his ESOPs is likely to be seen as a significant milestone in the company’s history. Goyal, who founded Zomato in 2008, has been instrumental in shaping the company’s strategy and driving its growth. Under his leadership, the company has expanded rapidly, both in India and internationally, and has become one of the leading food delivery platforms in the country.
As the company looks to the future, the decision by Goyal to relinquish his ESOPs is likely to have a positive impact on the company’s stock ownership structure and financial performance. The return of 3.3 crore shares to the company’s pool is expected to reduce the number of outstanding shares, which could help increase the EPS and potentially boost the stock price. Additionally, the decision may also help to alleviate concerns about the company’s stock ownership structure and the potential for further dilution of ESOPs.
In conclusion, the decision by Deepinder Goyal to give up his ₹1,000-crore Eternal ESOPs as he steps down as CEO is a significant development that is likely to have a positive impact on the company’s stock ownership structure and financial performance. The return of 3.3 crore shares to the company’s pool is expected to reduce the number of outstanding shares, which could help increase the EPS and potentially boost the stock price. As the company looks to the future, this decision is likely to be seen as a positive milestone in the company’s history.
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