Housing founders and employees are quite unhappy with their investors and the board.
The reason? They feel cheated on the way ESOPs issue has been handled.
The story so far.
- In the month of May 2013, Rahul Yadav announced that he will give away all his equity to the team.
“Rahul Yadav, the CEO of Housing.com has allotted all of his personal shares worth ~150Cr-200Cr (Rahul Yadav owns 4.5% stake in the company) to all the 2251 employees of Housing.com.”
- He was let go and after few months, Jason Kothari was appointed as the new CEO.
- 1.5 years later, Housing.com was merged with Proptiger.
And now, starts the real story. Housing cofounders quit the company a year before the merger and while signing up the merger agreement they notice that the board has allotted close to 6 lakhs shares to Jason Kothari (he is now the new CEO of Freecharge).
Later they find out that this 6 lakhs shares has come from Rahul Yadav’s allotment. Rahul, while pledging the shares to employees had clearly mentioned that the shares should only go to employees and NOT to senior management.
Housing cofounders and employees are quite dissatisfied with the board on how ESOP issue was managed. As per them, the board gave ONLY 97000 ESOPs to employees (at the time of merger) and many employees who as per the vesting calculation were supposed to have 1,000+ shares were left with only few 100s (while Jason who only spent 14 months got it all).
All employees who worked hard and were waiting for the shares have been kept in dark and hardly got anything. Also Rahul had clearly mentioned while donating that these shares will only go to employees and not even to senior management. The way the shares have been awarded to a single individual goes against the employees of company as well as raises questions on why board took this step.
Clearly, a case which needs to be addressed by the board (also: read up on redBus ESOP issue).
It’s time Indian startup (founders + investors + board) learns to keep its promise for it to be an exciting opportunity for the talent pool.