Retention of key employees appears to be the motive behind Flipkart’s move to grant Employee Stock Options or ESOPs. It is close to a year since the company, originally promoted by two Indian entrepreneurs, Sachin and Binny Bansal was taken over by the US retail giant Walmart. Only recently the annualised performance review has been conducted with the new owners. Some select top leaders in the company were chosen to receive the company’s shares under ESOP in November last, according to an Economic Times report.

This recent exercise however is more broad-based, and more employees have been included across the organization, like from Myntra and Jabong and at different levels. The total value of these ESOPs is likely to be $100 million in the hand of the employees but it comes with certain conditions on their being able to receive title and to encash the shares.

As per reports, there has been a performance assessment across the organization and middle and senior level executives have been selected to receive the perk. The price fixed is reportedly $125-$130 per share. The employees will get 25% of the allotted shares next year and a monthly vesting of the shares thereafter over a 3-year period. The quantum of shares allotted differs and while some will get a full year’s pay as the amount for allotment of ESOP others may get just half of that.

Observers point out that it is critical time for the ecommerce business operators since Reliance Industries is set to foray into the segment and it is difficult to estimate what the impact of that would be on the existing players. Apart from this consideration, there has been a natural progression of many startups which have grown enough to poach personnel from companies like Flipkart. Together, it poses a huge challenge to retain the best performers in key functions. The current ESOP exercise by Flipkart/Walmart has to be seen in this perspective. The precedent of the last ESOP exercise will act as a good example since several employees made millions that time.