ESOP crisis: Flipkart's former executives seek 'fair treatment' from Walmart
What's the story
Over 30,000 current and former Flipkart employees are collectively owed around $4 billion (₹38,000 crore) in employee stock option (ESOP) buybacks that Walmart has yet to process. As per Moneycontrol, the matter has become a major point of contention among the employees. Former employees make up about half of this amount, while current ones are entitled to the other half.
Executive concerns
Former senior executives take a stand
A group of at least eight former Flipkart CXOs and senior executives have written to Walmart's board, seeking "fair and equitable treatment" for their vested ESOPs.
The letter was signed by ex-Myntra CEO Mukesh Bansal, former Flipkart CBO Ankit Nagori, ex-CTOs Amod Malviya and Ravi Garikipati, former CPO Mekin Maheshwari, and also former VP Anuj Chowdhary.
Equity request
Letter sent a day after declining morale report
The ex-employees, who received their options between 2008 and 2016, have held some of them for over a decade.
They want Walmart to give eligible former employees the same liquidity opportunity given to current ones in the past.
The letter was sent a day after Moneycontrol reported on declining morale among Flipkart employees amid uncertainty around the company's IPO plans, and growing contrast with peers such as Snapdeal, Meesho, Groww, and Swiggy.
Past programs
Former employees not disputing previous ESOP buybacks
Flipkart has conducted several ESOP buybacks, generating over $1.5 billion in value for its employees when the company's valuation hit $38 billion.
The former employees aren't disputing these programs but argue that leaving the company shouldn't automatically mean losing access to an opportunity to realize equity earned during their employment.
They say they accepted stock-based compensation uncertainty during early years and continued holding interests after departure without a meaningful monetization opportunity.
Employee expectations
Current Flipkart employees feel shortchanged
While former employees feel unfairly treated, current Flipkart employees are in limbo waiting for a potential payday tied to the company's long-awaited IPO.
Several current workers feel shortchanged as peers at other companies have become millionaires.
Some say they haven't realized enough value from their equity to afford milestones like buying a home.
IPO impact
Backdrop of dispute is Flipkart's uncertain IPO timeline
The immediate backdrop to the dispute is Flipkart's uncertain IPO timeline.
A public listing has long been seen as the clearest route for employees to convert private-company equity into cash.
However, Flipkart's IPO plans have been repeatedly delayed.
Earlier this year, it was reported that talks for a private investment round of around $2 billion did not materialize.
Later, Walmart asked group CEO Kalyan Krishnamurthy to prioritize profitability over public market ambitions.