Swiggy's IPO, valued at ₹11,300 crore, has unlocked ₹9,000 crore worth of employee stock options (ESOPs), creating significant wealth for around 5,000 employees, with nearly 500 becoming 'crorepatis.' Employees can sell their shares a month after listing, thanks to a regulatory exemption, while the IPO was oversubscribed 3.59 times, driven by institutional investors. With its ESOP program spanning three plans since 2015, Swiggy's founders and top management collectively hold ESOPs worth ₹2,600 crore, emphasizing the company's commitment to rewarding employee contributions.

 

Employee stock ownership plans (ESOPs) are increasingly popular in Southeast Asia and India, with 80% of startups now offering them, up from 60% in 2021, as founders recognize their value in attracting talent and managing cash flow. Despite this growth, many founders still lack a deep understanding of ESOPs, underlining the need for better structuring and education to maximize their effectiveness. Meanwhile, funding news includes Easy, an Indian fintech startup, raising $35 million for mortgage technology expansion, and Razer Gold receiving in-principle approval as a major payment institution in Singapore, among other significant industry updates.

A 2024 study reveals that employee stock option plans (Esops) have grown in popularity among startups, with 78% of startups offering them, up from 59% in 2021, and one in three now extending Esops to all employees. Founders increasingly recognize Esops as vital for cost savings, culture-building, and talent retention, yet a lack of deep understanding among founders persists, especially regarding tax implications and option exercise requirements, which risks employee misunderstandings. Despite low initial grants, 72% of employees prioritize Esops when job-hunting, viewing them as a significant benefit, highlighting the need for startups to better educate themselves and their employees on the intricacies of these plans.

Syfe has launched its first-ever employee share buyback program, allocating up to SGD 5 million to enable nearly 200 current and former employees to benefit financially from their contributions. This milestone initiative, rare for a private company at such an early stage, underscores Syfe’s commitment to rewarding team members who have driven its growth and success. With a strong focus on expansion, profitability, and team engagement, Syfe continues to set a new standard in employee rewards while building a future of shared wealth and financial independence for its stakeholders.

As IPO activity is anticipated to increase in 2025, private companies planning for an IPO must carefully prepare their executive compensation programs to ensure successful transitions and sustained engagement. Pre-IPO considerations include addressing potential "cheap stock" issues through frequent valuations, proper recordkeeping, and alignment with SEC requirements, while also reviewing equity and bonus structures to incentivize executives. Post-IPO preparations often involve adopting a new equity compensation plan, granting IPO-related awards, formalizing executive agreements, and potentially implementing an Employee Stock Purchase Plan (ESPP) to align incentives for broader employee engagement and long-term success.

New Zealand's tax exempt thresholds for employee share schemes are set to increase under the proposed Taxation Bill, aimed at adjusting for inflation and boosting support for startups, particularly in the tech sector. The changes would raise the maximum value of shares offered to employees from $5,000 to $7,500 annually, and the employer's maximum discount from $2,000 to $3,000. These adjustments are intended to help early-stage companies recruit and retain talent, aligning employee incentives with company growth and contributing to broader economic recovery.

Startups often offer a mix of equity compensation and salary to attract and retain talent, with the balance dependent on the company's financial resources and the competitive market landscape. In the UK, the current high inflation and tight labor market have pushed average wages up by 13% since early 2022, making it crucial for startups to understand salary ranges and negotiate effectively. Equity compensation, while beneficial for startups in managing budgets and motivating employees, comes with complexities and risks that both employers and employees need to carefully consider.

A recent Sifted survey reveals that over a quarter of European startup employees see their stock options as a stepping stone to starting their own businesses, reflecting growing entrepreneurial optimism. However, about one-third are doubtful about the financial returns of their options, and many lack understanding of their true value, with over 40% unaware of their worth and nearly 45% not receiving guidance on how to exercise them. Effective communication of stock option benefits and proper scheme management are crucial for maximizing their potential as a tool for talent attraction and retention.

Civitta, in collaboration with Google, has released a comprehensive report on the Baltic startup ecosystem, highlighting its significant economic impact but noting challenges in scaling due to funding and talent shortages. The report emphasizes that while the startup sector is growing, only a few companies achieve substantial success, and leveraging stock options could help attract and retain top talent. Additionally, the report underscores the importance of persistence in securing funding and engaging with EU policy to facilitate growth and global expansion for Baltic startups.