Housing.Com CEO To Gift His Stake Worth 200 Cr To Employees

BANGALORE: Just a week past pulling back his resignation, Rahul Yadav, CEO of the startup, Housing.com, announced to gift his personal stake in the company to his employees. The 26-year old CEO believes it is too early for him to get serious with money, reports ET.

The IIT dropout who is good at creating stir made headlines with his decision to give away his stocks worth 150-200 crore to his 2,251 employees. The CEO, who loves to run into controversies, broke the news to his employees at a town hall followed by making a statement, "I'm just 26 and it's too early in life to get serious about money etc,"

Yadav presently owns 4.57 percent in Locon Solutions which is the holding company of Housing.com and his decision to give away his stake in the startup is yet to be formalized.

"Shares are like property that you can transfer in anyone's name till the time it is meeting the criterion in the shareholder's agreement signed at the time of forming the company," said Rajat Mukherjee, partner at law firm Khaitan & Co.

"Till the time (Yadav's share) transfer doesn't violate any clauses, it's legal. Though it's unprecedented," said Mukherjee, corporate law specialist. On the other hand, Housing.com is going to run out of capital in the next 4-6 months as the company has invested on outdoor campaigns and multimedia.

The major shareholder, Soft Bank, is yet to put its view forward on Yadav’s decision. The startup up till now has raised $120 million and the decision to distribute stock can help boosting spirits of the employees.

Deepak Menaria, angel investor and cofounder, Lemon School of Entrepreneurship, said, "At a 4.5 per cent stake, even if valued at Rs 150 crore, it is a temporary, but a motivation measure for employees who might be concerned about their future in this uncertain startup. The employees may stick around for a while even if the vesting period is more than 12-24 months," he added.

The board members were planning to return to the 10 lakh shares to the startup to raise the employee stocks earlier in May. Presently, shares for employee stock options are around 4 percent of the total whereas SoftBank has 32 percent in Housing, Nexus Venture owns 19 percent and Helion Ventures and Falcon Edge possess 10 percent respectively.

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