tata digital: Tata Digital could offer Esop to attract the best start-up talents
The company, which hosts consumer-centric digital businesses and competes with startups, first offered management stock options to the founders of the BigBasket online grocery store in which Tata Digital took over. majority stake.
It may also extend similar offers to employees, as many candidates from the startup community the company interviewed for various roles have reportedly researched ESOP in their compensation plans, the sources said.
Tata Digital has not commented.
The company had started by appointing senior talents from TCS. This prompted some industry experts to question whether the entity would be able to offer the right start-up culture and empower young talent to take on unicorns and other fast-growing startups in various digital service segments. .
“It’s about building unicorns and cashing out stock options in a short period of time compared to older established conglomerates that are into institution building,” said GC Jayaprakash, founding director of the executive search firm Accrete Executive Search.
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Tata Digital plans to offer stock options to potential employees and to reorganize its organizational structure to attract top talent.
He said Tata Digital will need to come up with compensation structures in line with the salary envelopes offered by startups.
“All startups, including Flipkart, Byju’s, Zomato, and Swiggy, offer huge payouts given the short shelf life of growing income and building valuations to attract top investors,” Jayaprakash said. “Tata Digital, as a new company, will also have to offer such compensation to attract start-up talent. ”
The digital entity – which is currently testing a super app with a large part of the Tata group’s employees as it prepares to offer the various services to consumers in the group’s companies on the same platform – is also working on its organizational structure.
It is considered a difficult task to secure key decision-making roles to external startup talents as well as some of Tata’s senior talents in leadership roles.
The new team of employees is expected to help Tata Digital establish a more interactive culture of technology-driven consumerism.
In June, the company appointed Mukesh Bansal, founder and CEO of fitness startup CureFit, as chairman.
While Tata Digital has appointed Modan Saha, a senior TCS talent, as CEO of its financial services vertical, it is not clear whether heads of other verticals will be named CEOs.
“Saha is a senior resource with a deep understanding of the financial space and has the ability to oversee the entire financial vertical including payments and insurance among others,” said a senior official close to development. “The finance vertical will also be a very critical function and needs Saha’s caliber. Other areas may not have CEOs and everyone will report to Pratik Pal, CEO of Tata Digital, ”the person told ET on condition of anonymity.
Plans to raise $ 5 billion
Tata Digital is also looking to attract early investors to raise around $ 5 billion for the capital-intensive e-commerce platform, sources said.
The entity is said to have held talks with a group of long-term investors, including the Canada Pension Plan Investment Board, Singapore’s Temasek Holdings, SoftBank Group and Abu Dhabi Investment Authority.
The group offers various offers in the fields of e-commerce, financial services, fashion, lifestyle, among others, to create a loyalty program for its 45 million and more customers, which will help them to use the ecosystem of Tata services and goods.
The management share ownership plan (MSOP) currently granted to certain senior officials who have joined BigBasket was reportedly based on the startup’s past performance and the future potential of eligible employees.
The vesting period begins three years from the date of grant and the value increases as the valuation of the company increases before it reaches the public market within an estimated period of 2 to 3 years.