Paytm share price plunges over 2% after CEO Vijay Shekhar Sharma forgoes 2.1 crore ESOPs; Do you own?

One97 Communications, parent company of Paytm, share price dipped over 2 per cent in Thursday's trading session after Managing Director and CEO Vijay Shekhar Sharma voluntarily gave up 2.1 crore shares.

These shares had been allotted to Sharma under the employee stock ownership plan (ESOP) during the company’s listing. One97 Communications is the parent company of the Paytm brand.

At 10:20 am, Paytm share price was trading at ₹849.20 apiece, against previous close at ₹864.95.

Paytm CEO forgoes 2.1 crore ESOPs

“Vijay Shekhar Sharma, Chairman, Managing Director and Chief Executive Officer of Paytm, vide letter dated April 16, 2025 has informed the company that he has voluntarily forgone all 2,10,00,000 (Two Crore Ten Lakhs) ESOPs granted to him under One 97 Employees Stock Option Scheme, 2019, with immediate effect,” the company said in an exchange filing.

"This will result in a one-time, non-cash, acceleration of ESOP expense of ₹492 crores in Q4 FY 2025, and an equivalent lowering of ESOP expenses in future years. As a part of our normal practice, we will share the illustrative ESOP cost schedule along with our Q4 FY 2025 results," it added.

Based on Paytm’s closing share price of ₹864.5 per share, the ESOPs are valued at ₹1,815.45 crore. These shares were allotted to Vijay Shekhar Sharma as part of the Employee Stock Ownership Plan (ESOP) during the listing of One97 Communications, the parent company of Paytm. The shares will now revert to the ESOP pool under the One97 Employees' Stock Option Scheme, 2019.

A year before Paytm’s 2021 IPO, Sharma held a 14.7% stake in the company. To qualify for ESOP allocations, he reduced his stake to 9.1% by transferring 30.97 million shares to Axis trustee Services, representing his family trust. SEBI had issued notices to Sharma and other board members involved during Paytm’s November 2021 IPO for alleged misrepresentation of information.

SEBI order against Paytm ESOP grant

In August 2024, SEBI issued a show-cause notice to Paytm concerning the ESOP grant awarded to Vijay Shekhar Sharma, citing a breach of regulations related to share-based employee benefits. Under SEBI's rules, significant shareholders who can influence a company's decisions are not permitted to hold ESOPs.

In March, Paytm revised its ESOP policy, introducing a performance-based vesting structure tied to employees' latest annual appraisal ratings, along with other modifications. Additionally, the company has expanded its ESOP pool recently and granted ESOPs to eligible employees on at least two occasions within the past six months.

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