Deepinder Goyal, the co-founder and CEO of food technology company Zomato, rekindled the welfare spirit of old-world corporate India on Friday when he announced his decision to donate all his stock options vesting this year, worth about Rs 700 crore, towards educating the children of his company’s delivery partners. The twist is that Goyal is deploying what would have become his personal wealth, whereas old corporate India used company resources for welfare.
In an internal note, which is being widely circulated, Goyal said he would donate all his ESOPs proceeds this year, net of taxes, to Zomato Future Foundation to cover the education of up to two children of all Zomato delivery partners who have been on its fleet for more than five years. To begin with, it will cover expenses up to Rs 50,000 per child per annum on actuals, which could rise to Rs 100,000 if the delivery partner completes 10 years with Zomato. The tenure thresholds will be lower for women.
“I believe that education is the one and only thing that can give them (the children of delivery partners) a chance to build a life much better than their previous generations,” said Goyal.
According to the company’s statement last August, Zomato had 310,000 active delivery partners in July of 2021, the highest-ever number in the platform’s lifetime.
The e-commerce and gig economy, in which Zomato has a large role, grew 8 percent in 2020 and 30 percent in 2021. However, with this growth have come concerns about the safety, wellbeing, and welfare of gig workers.
The condition of the delivery people became a much-debated topic when Zomato announced 10-minute deliveries and also when one of its delivery persons died in a road accident.
The India Philanthropy report 2022 by Bain & Company and Dasra, a non-profit, says a new breed of technology entrepreneurs who have joined the ultra-high-networth individual category – those with net worth exceeding Rs. 1,000 crore – have begun to dominate philanthropy. They accounted for only 8 percent of the UHNI wealth in India but made 35 percent of philanthropic donations.
Goyal was granted ESOPS by Zomato’s investors and board based on his performance right before the company went public last year. Some of these ESOPs vested last month because the law stipulates a minimum one-year vesting. To reap the most benefit for the foundation and protect the interest of Zomato’s shareholders, Goyal will not liquidate all these shares immediately “but over the next few years”. For the first year, he will liquidate less than 10 percent of these ESOPs towards Zomato Future Foundation.
According to the draft red herring proposal (DRHP) document, dated July 6, 2021, the number of options granted to Deepinder Goyal, for the period April 01, 2021 to the date of Red Herring Prospectus are 368,500,000. For each option exercised one equity share shall be allotted. (Source: Business Standard)
