Covid-19 Impact: Oyo Sends Letter Granting ESOPs To All Employees

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Hotels and Homes has decided to make each of its employees a shareholder of the startup by granting 'deep-discounted (Employee Stock Ownership Plan)'.

In a letter sent to all employees, said, all employees would be receiving deep discounted (comparable to restricted stock units or RSUs) at pre-determined prices with effect from June 1. Business Standard has reviewed a copy of the letter.

"'This step is unprecedented in the history of both in terms of number of people covered through stock options and also in terms of ESOP 2018." the letter said. The company also noted that Covid-19 pandemic has had a "deep impact" on its business and the was one of the steps to ensure company's long term sucess and sustenance.

"The RSUs will have a deeply discounted price of Rs 10 per share and will have a cliff vesting period of 1 year from date of grant," according to the letter, which was signed by Oyo’s Chief of Human Resources, Dinesh Ramamurthi. The decision was, however, yet to be approved by the board and other shareholders.

The move comes as Oyo decided to lay off a large number of its employees in the United States last week, but reward them with stock options.

Earlier in May, Oyo Hotel and Homes has allotted ESOPs worth $20 million to its employee’s welfare trust, and passed a resolution to approve allotment of 388 equity shares under the company’s ESOP 2018 plan. The company allotted these shares to Dinesh Ramamurthi, and also the trustee of Oravel Stays Employee Welfare Trust on behalf of employees who sent the exercise notices for vested options.