Paytm may be evading regulation to grant employee stock options to founder then chief executive officer Vijay Shekhar Sharma, giving to proxy advisory firm Institutional Investor Advisory Services.
While Sharma isn’t confidential as a promoter – Indian parlance for controlling shareholder – he has human rights akin to one, including a potential permanent bench on the board, IiAS said in a note Friday. “These necessities and structures give Vijay Shekhar Sharma ‘entrenchment’ like that enjoyed by promoter families in the more outdated companies,” IiAS said.
It added the manager must examine Sharma’s move to pare his direct picket by transferring equity to a household trust, barring which he wouldn’t be entitled to the Employee Stock Option Plan.
Paytm founder may not be eligible for Esops: Proxy firm
Indian law bans stock options to promoters, and to directors who directly or circuitously hold more than 10 percent of the stable. Scrutiny over pay has also augmented after Paytm sank 75 percent since its original public offering last year, following which Sharma in April said his stock endowments would vest only after the company’s market capitalization beat the IPO level on a “sustained basis.”
Reiterating that report in response to the IiAS report, Paytm’s spokesperson said to Bloomberg the company had trailed all provisions of applicable law in classifying Sharma as a non-promoter and observed due process for the grant of ESOPs, plus shareholder approval. His remuneration remnants unchanged since November 2020 and through 2025, the spokesperson thought.
Sharma settled 21 million options at ₹9 a share in the financial year finished March 2022, then valued at $500 million.