OYO Rooms, A Gurgaon based Hotel & Hospitality chains had offered to issue Deeply Discounted ESOPs to all employees and making them all as shareholders.
What is ESOP?
Employee Stock Ownership Plan (ESOP) is an Employee Benefit plan which allows the Employees to buy a certain number of shares of the Company they are working for. ESOP gives the employees Ownership interest in the Company.
OYO offering Deeply Discounted ESOP
Oyo had sent a letter to all its employees stating that they are willing to offer deeply discounted ESOPs to all. They had expressed their interest of making the employees, the owners of the Company.
Earlier in April, Oyo had declared 25% reduction in Fixed Compensation and also furloughed some employees like “leave with limited benefits” for a period of 4 months from May 2020.
The letter offering deeply discounted ESOP’s had been sent to all employees, including to those who were in Leave with Limited Benefits.
According to the letter, all employees would be receiving deeply discounted ESOPs (comparable to restricted stock units and referred as RSUs) at pre-determined prices with effect from June 1. However, the decision is subject to the Board’s Approval and other necessary Corporate Approvals under the applicable laws.
“All 100% of RSUs would be vested at the end of one year from the date of the grant…Our efforts are in line to reward the employees for the long term as they had sacrificed their salaries to support….” was mentioned in the letter signed by Mr.Dinesh Ramamurthi, Chief of Oyo’s Human Resources.
Earlier in May, Oyo Hotel and Homes had allotted ESOPs worth $20 million to its employee’s welfare trust and passed a resolution to approve allotment of 388 equity shares under the company’s ESOP 2018 plan.
The company also added that Covid-19 pandemic had a “deep impact” on its business, and the ESOPs was one of the steps to ensure Oyo’s long-term success and its commitment to employees.
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