Keeping up with the Employee Stock Ownership Plan (ESOP) rage, social commerce platform Meesho has rolled out MeeSOPs -- a portmanteau of Meesho and ESOPs -- for its employees. MeeSOPs have some similarities to ESOPs as it is a wealth-creation opportunity, will inculcate higher ‘ownership’ amongst Meesho employees, enhance employee retention and motivate them to have vested interest in the growth of the company.
With MeeSOPs every employee has a choice to convert up to 25 per cent of their annual CTC into ESOPs, which vests 100 percent in one year, regardless of their seniority or designation. For the amount each employee converts to ESOPs, Meesho adds a top-up- this can be between 15 per cent-25 per cent based on the employee’s tenure.
When employees allocate a part of their salary for MeeSOPs, their monthly tax deducted at source (TDS) also reduces accordingly and they come with zero tax liability at the time of stock grant and vesting. MeeSOPs will follow the same competitive vesting cycle as ESOPs.
But how does this work? For instance, an employee’s annual CTC is Rs 30 lakh and she opts to convert 25 percent of her salary, i.e., Rs 7.5 lakh into MeeSOPs. She is associated with Meesho for 25 years so the company will add another 25 percent to her MeeSOPs. Her total MeeSOPs grant value then becomes over Rs 9.37 lakh, the company stated.
These MeeSOPs aim to increase employee participation in the Meesho growth story. “Now that Meesho is valued at $4.9 billion, (as of publishing this article) we wanted more folks to participate in our growth. We went back to the drawing board and asked, how [we can] get each and every employee the option to participate in our growth story,” Meesho noted in its blog.
Meesho Co-Founder and CTO Sanjeev Barnwal tweeted, “ESOPs are tricky, grey area. Sometimes it’s designed to ‘cage’ employees, instead of helping compound wealth. If a company matures, and is growing because of its people- we have to pay it forward. Which is what we did.”
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