Tata Digital has launched a new employee stock option plan (Esop) for its senior executives as part of a larger push to instill a performance-driven culture. This decision, led by CEO Naveen Tahilyani, comes on the heels of major turnover in the company’s senior leadership.
Tata Digital, which manages the Tata Neu superapp and owns online platforms such as BigBasket and 1mg, supported the revised Esop proposal at its recent annual general meeting (AGM). The plan has a minimum vesting term of three years. Senior executives in specified grades will have their stock options converted into business shares, while those at the director or lower levels would receive cash in exchange for their options.
This endeavor is consistent with Tata Digital’s strategic goals, which include increasing revenue, improving the consumer experience through a user-centric finance platform, and reaching profitability to attract external investors. While some staff have applauded the Esop idea, the feedback has been mixed.
Tahilyani, who took over as managing director and CEO in February, has been revamping the senior management team, resulting in the departure of numerous executives, including Myntra founder Mukesh Bansal. Executives who departed the company within the last two years are unlikely to gain from the new Esop plan.
The AGM also accepted the appointment of Tata Sons’ Chief Financial Officer, Sourav Aggarwal, to Tata Digital’s board. The new Esop plan, which begins on August 16, is part of a larger effort to connect employee interests with corporate goals, recruit and retain talent, and incentivize people to contribute to the firm’s growth and profitability.
Tahilyani is recognized for his strong accountability standards and has been striving to combine Tata Digital’s many businesses, including BigBasket and 1mg, which still operate with a startup mindset. He has met with the founders of these companies to discuss current issues, and Tata executives are now more involved on the boards of these companies.
In 2022, Tata Digital invested $200 million in BigBasket and $41 million in 1mg to help it achieve unicorn status. While both companies are growing, their existing investors choose to raise debt rather than shares, avoiding external investors setting prices for key assets like Big Basket.
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