Paytm Founder Vijay Shekhar Sharma Returns Rs 1,800 Cr Worth ESOPs - Here's Why

One97 Communications Ltd, which operates fintech major Paytm, CEO Vijay Shekhar Sharma has voluntarily surrendered 21 million shares worth Rs 1,800 crore that were previously granted to him under the company’s Employee Stock Ownership Plan (ESOP), it said in an exchange filing on Friday. These shares will lower the ESOP expenses by around Rs 492 crore, the company said.

“Vijay Shekhar Sharma, Chairman, Managing Director and Chief Executive Officer of the company vide letter dated April 16, 2025, has informed the company that he has voluntarily forgone all 2,10,00,000 ESOPs granted to him under One 97 Employees Stock Option Scheme, 2019, with immediate effect,” the exchange filing read.  

This move came after the Securities and Exchange Board of India (Sebi) issued show cause notices to Paytm for flouting ESOP grant rules. Paytm founder received these shares in 2021, according to the company’s ESOP policy, 2019, just before the fintech major went public.

“This will result in a one-time, non-cash, acceleration of ESOP expense of Rs 492 crore in Q4 FY 2025, and an equivalent lowering of ESOP expenses in future years. As a part of our normal practice, we will share the illustrative ESOP cost schedule along with our Q4 FY 2025 results,” it added.

Paytm’s ESOP Issue

To become eligible for Paytm’s ESOP programme at the time, Sharma, who then held a 14.7% stake in the company, transferred 30.9 million shares to Axis Trusteeship Services, acting on behalf of the Sharma Family Trust. This move brought his stake below the 10% threshold—qualifying him for the ESOP plan while ensuring he was not classified as a promoter.

For endorsing Sharma’s stand, the market regulator also issued notices to other directors on the company’s board. On April 16, Paytm's founder informed the company about his intentions to return the shares he held. The fintech platform cancelled these stocks which were later returned to the ESOP pool.

This development came after Reserve Bank of India (RBI) barred Paytm’s associate entity, Paytm Payments Bank, from providing banking services to customers. In response, Paytm is now shifting its focus towards strengthening its core offerings—payments, loan distribution, and other financial products—as it works to steer the business back on course.