Paytm CEO Vijay Shekhar Sharma Surrenders ESOPs Amid SEBI Scrutiny

Paytm founder and CEO Vijay Shekhar Sharma has voluntarily given up 21 million unvested employee stock options (ESOPs) previously granted to him. 

Regulatory Pressure Prompts Voluntary Surrender 

The surrender follows the issuance of show-cause notices from the Securities and Exchange Board of India (SEBI) over alleged violations related to the issuance of share-based benefits. SEBI had flagged the grant in August last year, asserting that the allotment was not in compliance with existing regulations governing employee benefit schemes. These stock options were originally awarded in FY22, contingent upon the achievement of specific performance milestones.

Financial Implications and Shareholding Adjustments

As a result of the surrender, Paytm will now incur a one-time, non-cash acceleration of ESOP expenses amounting to ₹492 crore in the fourth quarter of FY25. Originally, the company intended to recognise ₹637 crore in ESOP expenses over the remaining vesting period, as per Ind AS 102 accounting standards. The surrender of options will reduce this projected cost, easing the company’s future expense load and potentially improving its operating profitability.

Under Indian regulatory norms, significant shareholders with considerable influence over company decisions are not eligible to receive ESOPs. To meet eligibility criteria, Sharma had previously reduced his stake in Paytm from 14.7% to 9.1% in the run-up to the company’s IPO in 2021. This was achieved by transferring over three crore shares to Axis Trustee Services, which acts on behalf of the Sharma family trust.

Paytm Share Performance 

As of April 17, 2025, at 12:15 PM, One97 Communications Share Price is trading at ₹853.50, reflecting a 1.32% decline from the previous closing price. Over the past month, the stock has delivered positive returns of 15.12% 

Conclusion

Vijay Shekhar Sharma’s decision to forgo his ESOPs reflects a notable step amidst ongoing regulatory oversight and aims to align with SEBI guidelines. While this move results in a substantial immediate cost, it positions Paytm for a potentially more sustainable financial outlook by reducing future liabilities.

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