One 97 Communications, which operates Paytm, has proposed changes to its employee stock option framework that would link future ESOP vesting more closely to performance while keeping the overall option pool unchanged.
According to the company’s 26th Annual General Meeting notice, the amendments to the One 97 Employees Stock Option Scheme 2019 will require higher levels of performance for full vesting, with the number of options that vest determined on a graded basis. The changes are subject to shareholder approval through a special resolution.
Under the existing framework, employees rated “Meets expectation” or a similar rating and above were eligible for 100% of the options due to vest on a given date. Under the revised approach, only employees with an ESOP rating of “Meets expectation” and above will qualify, with vesting ranging from 10% to 100%, and the ESOP rating approved by the CEO.
The AGM notice describes the amended policy as “more stringent and performance-differentiated,” with full vesting tied to higher levels of performance and vesting entitlements calibrated to performance outcomes.
The change applies only to future grants. Options already granted under the 2019 scheme will continue on their existing terms, with no change to the rights and obligations of current option holders.
Paytm is not expanding its ESOP pool as part of the revision. The AGM notice states that the amendments “do not result in any incremental dilution or increase in the maximum number of options” that can be granted under the scheme.
The move fits a wider trend among listed new-age firms of tightening the link between equity rewards and measured performance, rather than expanding the size of stock-based pay.
