May23 , 2022

deepinder goyal: Zomato CEO Deepinder Goyal donates Esops worth Rs 700 crore to Future Foundation

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New Delhi: Zomato CEO Deepinder Goyal announced on Friday that he would donate all proceeds from the employee stock options (Esops) he received from investors and the board of directors to the Zomato Future Foundation (ZFF).

At Zomato’s average share price over the past month, these Esops are worth around $90 million (Rs 700 crore), he said in a note.

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On Friday, the Zomato scrip hit a 52-week low of Rs 57.65. The stock is down 62% from its all-time high in November last year.

“To reap the most benefit for ZFF, and protect the interests of our shareholders, I do not intend to liquidate all these shares immediately but over the next few years. For the first year, I will liquidate less than 10% of these Esops towards this fund,” Goyal said.

He added that the Future Foundation will also accept donations from other Zomato employees and will look at other fundraising avenues. It also plans to set up an independent governance board.

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Food delivery companies have been under pressure from gig workers, who protested on Twitter last year, saying they are treated poorly and not paid enough, as
ET reported in August.

In response, Swiggy and Zomato have amped up their external messaging on their treatment of delivery partners, introduced new ‘career progression programmes’, and used delivery partners in their ad campaigns. Swiggy, for instance, launched an accelerator program for its delivery executives to transition to full-time and managerial-level jobs in April. Zomato has a similar scheme and has been sending a “delivery partner of the month” communication to its customers since last year.

ZFF marks the company’s latest move in this regard. But according to researchers tracking India’s gig economy, programmes such as these would not be needed if delivery workers’ incomes were relatively stable and protected by legislation.

Zomato did not immediately respond to ET’s query on this criticism.

ZFF will cover the education of up to two children of all Zomato Delivery Partners. This will be up to Rs 50,000 per child per year on actuals, for workers above a certain service quality benchmark and who have been on Zomato’s fleet for more than five years. If the worker stays with the company for 10 years, the amount will increase to Rs 1 lakh per child every year.

Zomato’s five-year and 10-year eligibility criteria are a way of countering the high churn in the gig economy, an industry source said, with about 60-70% of delivery workers moving on within months.

ZFF will also provide higher education scholarships over and above these limits for children with higher performance and potential, it said.

The foundation will also assist families of its delivery partners (regardless of service term) with educational and livelihood support if they, for instance, suffer an accident while on the job.

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