Someone anonymously posted this comment to our earlier story. Based on Onmobile’s public filings, the person has done an analysis, which indicates the successes in Onmobile ESOP plan. The analysis is based on share price of Rs 520 as of July 8th. While these are estimates, it seems that they are broadly right – I also did a further segment of Rs 10 crore+ gainers…
| Wealth Range (Rs) | Number of Employees |
| > 10 crore | ~10 |
| 1-10 crore | ~35 |
| 50-100 lacs | ~25 |
| 10-50 lacs | ~80 |
This does not include starting execs who can be deemed founders. Now thats some serious wealth creation for employees! Way to go! and thanks for the poster.
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This is the poster again :). You are welcome Alok.
Jaspreet, I too am flummoxed by 40% stocks given out as ESOPs. Wonder if this is a norm or whether this company bucked the trend. Wonder if this led to their phenomenal success. I hope some strategy professor at IIM Bangalore would get invited to write a case on OnMobile and we would discover the truth.
Asking all the VCs out here: what is your advise to your companies? How much do you suggest they set up as an options pool for employees other than founders.
Arun, I agree with your general observation that many employees value cash over ESOP. However, on a specific basis, “good” founders are already being successful in finding the gems (from a startup perspective) who are passionate about the business, and value ESOPs. Remember, that perhaps less than 1% of the talent pool is what you need in startups at core levels – are there 1% of the people who carry a dream in their hearts that goes beyond current cash – I think so.
For the rest 99%, there is the 8% bank deposit.
Isn’t 40% in ESOPs on the higher side ?
Typically 2-3 years old company give of max 10% shares to employees. All the C*Os do get some extra.
Alok, thanks for sharing this. However, on the flip side, in my many discussions with entrepreneurs, I often find them complaining that when they are interviewing candidates, given a choice, the potential recruits mostly value cash more than stock (blame it on the risk averse mindset inherent in our culture). Therefore, are entrepreneurs really to be blamed for the low ESOP pools they provide for? Risk averse employees are equally responsible for the low levels of stock compensation in Indian startups. My sense is that is employees become more receptive to having a higher component of stock than cash in their compensations, “good” founders shouldn’t have a problem complying with that.
hope some of the >10 crore’s ones start doing angel investments. 🙂