In a surprising move, Vijay Shekhar Sharma, the Managing Director and CEO of One97 Communications, has voluntarily surrendered 2.1 crore shares of the company. These shares were valued at around ₹1,800 crore, based on the latest closing price of ₹864.5 per share.
What Are These Shares?
These shares were not regular shares bought from the market. They were part of an Employee Stock Ownership Plan (ESOP) – a benefit given to top executives and employees when One97 Communications, the parent company of Paytm, got listed on the stock market.
Under the One 97 Employees’ Stock Option Scheme, 2019, these shares were granted to Sharma as a reward and incentive for his leadership. However, as per a filing made to the stock exchange, Sharma has decided to give up all 2.1 crore ESOPs on his own, with no compensation in return.
Why Is This Important?
By giving up these shares, Vijay Shekhar Sharma is sending a strong signal of commitment to the company and its shareholders. Instead of cashing in on these shares — which could have earned him over ₹1,800 crore — he chose to return them.
These shares will now go back to the ESOP pool, meaning they can be used in the future to reward other deserving employees.
Financial Impact on Paytm
According to the company’s official statement:
- The move will cause a one-time ESOP expense of ₹492 crore in the fourth quarter of FY25.
- However, this will reduce future ESOP-related expenses in the coming years.
It’s important to note that this is a non-cash accounting expense. It won’t affect the company’s actual cash flow but will appear in the financial statements as per standard accounting practices.
In Simple Terms
Here’s what happened in simple words:
- Vijay Shekhar Sharma gave up shares worth ₹1,800 crore that were meant for him.
- He did this voluntarily and without asking for anything in return.
- These shares were originally granted under an employee reward plan.
- This action will affect the company’s books this year but will reduce expenses in the future.
Conclusion
This decision by Paytm’s CEO reflects his long-term vision and support for the company’s growth. It may also improve investor confidence, especially at a time when tech companies are under close watch for profitability and leadership decisions.
