In a warm and generous gesture, Zomato CEO Deepinder Goyal announced that he would donate all proceeds from the employee stock options (ESOPs) that he received from investors and the board of directors to the Zomato Future Foundation (ZFF).
As per Zomato’s average share price over the past month, these ESOPs are worth around $90 million (Rs 700 crore), he said in a note.
“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.
The 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, he added.
Zomato Future Foundation Benefits
The Zomato Future Foundation will cover the education of up to two children of all Zomato Delivery Partners. This will amount to ₹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 with every passing year.
ZFF will also provide higher education scholarships over and above these limits for children with higher performance and potential.
The foundation will 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.
Experts state that Zomato’s 5 and 10-year eligibility criteria are a way of countering the high churn in the gig economy, with about 60-70% of delivery workers moving on within months. Yet programs such as these would not be needed if delivery workers’ incomes were relatively stable and protected by legislation.
Shares of food aggregator Zomato dived 10 percent to hit an all-time low of Rs 51.3 on BSE. Of late, the stock has been in the bear grip amid an ongoing market correction.