There is no stopping to the Housing fiasco as CEO Rahul Yadav recently gave away his entire 4.57% of personal stake to his employees. The total amount stands somewhere between 150-200 crores. While this unprecedented move in start-up industry may be seen as a good-natured act of generosity, investors and close colleagues were quite shocked with Yadav’s decision.
Barely five days ago, the leadership and board of directors had commited at a board meeting to part with a small part of their stake. This decision was mutually agreed to form a larger pool for employee stock options. Before this, the co-founders had contributed to the ESOP by giving away portions of their individual stakes.
Yadav’s move can be seen as a way to endear himself to his employees since he would need all their support in dealing with the board. As a justification, he said that he’s just 26 and it is too early for him to get serious about money. He also added that he aims at making the company a global online housing platform rather than focusing on money.
Moreover, his decision to gift away his shares to his employees can be questioned since it was made without the board’s approval. Founder shares cannot be given away unless other shareholders and investors waive of the first right of refusal. If the board decides to cancel this transfer, Housing’s employees will not take it well.
After arguments over strategies and operations, a letter of resignation that criticized the company’s board members and the subsequent withdrawal of the same, it is clear that somewhere Yadav and his team may not be on the right note. Maybe all Housing needs is a streamlined workflow that is beneficial for both Yadav and the board to co-exist and work peacefully for the betterment of the company.
