Deepinder Goyal To Donate ESOP Proceeds Worth Rs 700 Crore To Zomato Future Foundation
Food tech major Zomato’s founder and Chief Executive Officer Deepinder Goyal will be donating all his employee stock option plan (ESOP) proceeds worth Rs 700 crore to Zomato Future Foundation, according to an internal communication sent by Goyal to Zomato’s employees. This is among the various other measures that the food tech and quick commerce companies are taking to curb the attrition of the delivery executives.
“Right before we went public, I was granted some ESOPs by our investors/ board, basis my past performance and some of these ESOPs vested last month because there's a minimum one year vesting required as per law,” Goyal said in the letter.
“At the average share price over the last month, these ESOPs are worth $90m or Rs 700 crore. I am donating all the proceeds from these ESOPs (net of taxes) towards the Zomato Future Foundation,” Goyal added.
The Zomato Future Foundation will be covering education of up to two children of all Zomato delivery partners, up to Rs 50,000 per child per annum on actuals, above a certain service quality benchmark, who have been on Zomato’s fleet for more than five years, according to the internal memo.
Goyal further said that the amount will go up to Rs 1,00,000 per child per annum if the delivery partner completes 10 years with Zomato. For women delivery partners, the service thresholds will be lower and Zomato Future Foundation will introduce ‘prize money’ for girl children if a girl completes 12th grade and her graduation.
Along with this, the Zomato Future Foundation will offer higher education scholarships for children with higher performance and potential, Goyal said. The foundation will also offer livelihood support to the families of all its delivery partners, irrespective of their service tenure, who encounter accidents on the job, Goyal said.
Zomato Future Foundation will also open to donations from other Zomato employees, Goyal said, adding that the company is exploring other fundraising opportunities for the foundation. Zomato will also set-up an independent governance board for the Zomato Future Foundation, Goyal said.
“This is just the start. As and when needed, we will keep expanding and re-evaluating the scope of this Foundation to benefit our ecosystem further.”
Goyal further added, “I am especially pumped for what this foundation will do for our delivery partner's children - I believe that education is the one and only thing that can give them a chance to build a life much better than their previous generations.”
This move comes at a time when Zomato has started its 10-minute delivery and is riding on BlinIt for its quick commerce. Zomato Future Foundation is not the first initiative that Zomato has undertaken. The food tech company had also started a not-for-profit organization called the Feeding Foundation, providing food security to daily wage workers in 2020. Zomato had also launched it in the Philippines, called Feeding Philippines.
Zomato had also launched ‘Zomato Gold Support Fund,’ to support restaurants and their workers in 2020, right after the first lockdown was announced. The fund was open for donations from all users, and the food tech company had said that all its proceeds would go towards supporting restaurant workers in need. As an incentive to donate, users were offered an additional year of ‘Zomato Gold'.
The food tech major has also launched other initiatives like ‘Rider Relief Fund’ and ‘Covid Insurance,’ for its delivery partners since the onset of the pandemic.
On the other hand, Swiggy and Zepto now allows its delivery partners to join full-time roles in the companies based on their performance.
As the delivery models evolve, the attrition among the delivery partners is 18-20% month on month which becomes a major issue for these companies. Over the last month, companies have announced several initiatives with the intent to curb attrition, which signals the intensifying competition in the space.
To add to this, many times these new-age companies have faced flak for their harsh contractual agreements with these workers. While companies often boast about the flexibility that they provide to these workers, in reality, they often work long hours despite harsh weather conditions, without additional incentives or benefits and uncertainty of their earnings.
Last year, IFAT, a registered union and federation of trade unions representing gig workers, approached the Supreme Court seeking directions against four companies and the Union of India for violation of fundamental rights. Additionally, there is no clarity on how gig workers’ wages are determined. While few companies pay based on hourly basis, some pay based on commissions and incentives. These workers are also not recognised under the Code on Wages 2019, which guarantees the daily minimum wages.
