24 highlights
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Till two hours before he actually left the building, nobody had a clue that Pravin Jadhav, the managing director and CEO of Paytm Money, was on his way out.
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At the heart of the issue was a promise made by Sharma to Jadhav some three years back, that in exchange for building Paytm Money, Jadhav would be rewarded with a minority stake of 25% in Paytm Money.
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Equity in a company is different from ESOPs—short for employee stock option plans. Direct equity means you have a stake in the company, which may or may not have a vesting period (a specific time frame over which you receive the shares allotted to you in tranches). ESOPs, usually offered to employees as part of their overall compensation package, technically grant a right to buy a certain number of shares at a fixed (relatively low) price, and have more onerous clauses and vesting periods.
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The ESOP offered wasn’t dated 2017 but 2020 instead, which would mean that Jadhav’s complete vesting would take another five years. Jadhav felt cheated and insisted that he be given what was agreed upon or nothing. He set the board a deadline of 31 March.
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Looking at this particular event from the outside, with your dispassionate cap on, you dear reader might surmise, well such are the ways of the world. If you are gullible enough to not document a promise of a 25% stake then perhaps you’ve had it coming all along. Trusting people is a fine way to live life, except not following the maxim “document first, trust later” ends only one way—with you in the hole.
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While that will be true, a simple reading of this event would be missing the woods for the trees. Because Jadhav’s case is just the tip of the iceberg. It screams the fact that over the last twelve months, top executives have been on their way out of Paytm like rats jumping off a sinking ship.
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The former employee, a management trainee hired from one of the best management schools in India, remembers like it was yesterday. He quit Paytm early this year, disillusioned by the disconnect between what he thought Paytm would be and what he actually found. And what irks him even now is the dining room show.
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Sharma would enter the dining area and proceed to his chair, one exclusively reserved for him. He would then be served food in glass plates and bowls, unlike the sea of employees around him, second-grade citizens who’d make do with plastic containers and picking food themselves. While Sharma would eat, an attendant would always stand behind him, careful to fulfil his every need.
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There’s this other story that, internally, Paytm has been struggling between payments using its digital wallet and the Unified Payments Interface, or UPI. There’s this constant tussle on what to focus on because Sharma believes that the future is digital wallets, a product which inherently belongs to Paytm, while UPI does not.
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Digital wallets like Paytm, MobiKwik and FreeCharge were once at the forefront of digital payments in India, with Paytm well in the lead. Today, UPI sees more than three and a half times the transaction volumes that wallets do (going by pre-lockdown figures).
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Teams have been at loggerheads with Sharma enough number of times with the view that there’s nothing more to be built on top of a digital wallet, while UPI is an open road with several products that can be built on top of it. But Sharma would have none of that.
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In review meetings or introduction sessions, Sharma often does not remember the names of the people he is meeting. His schtick is to open their LinkedIn profiles on his phone which he scans for words in over five or ten seconds. Whatever jumps at him. “This is by far the craziest Vijay quirk,” said the second former Paytm employee quoted above. “People would be scared of what they put in their LinkedIn bios because he would pick a word like ‘game’ and transfer you in the gaming business.”
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There’s this story told as legend inside Paytm of an Indian Institute of Management graduate who instead of picking a job, hung around and built a product on campus, funded by the institute’s incubation unit. Later on, his startup was acquired by Paytm. Now this person on his LinkedIn profile had listed some experience of managing events, just an obscure thing that people write in their bios. Unfortunately, this caught the attention of Sharma, who in a meeting transferred him from product to sales. Needless to say, the guy quit shortly.
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There’s a common joke in Paytm where employees quip, so which side of the bed did Vijay get up from today?
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A former Paytm executive who spent a long time at the company in the product vertical, and eventually got tired of the culture, says most quirks about Paytm are of a company growing up too fast and trying to do too many things.
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“But working at Paytm is like dancing with golden anklet bells,” he said. “You have to dance a very nice dance for four years till your ESOP gets vested and then you quit.”
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But in 2019 Vijay started feeling that people were not loyal to him. He was disappointed that people were just waiting for their shares to vest. It started playing on his mind saying this is not fair. From pro-wealth, I saw that in 2019, Vijay became anti-wealth
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Now, this is indeed tricky for a leader, where a sort of perverse money-making culture seeps into the company. It is tough to argue either for or against it because startups are in large part about wealth creation. But what they are also about is a work culture that excites and challenges people to stick with the company.
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This is again one of those Sharma quirks that isn’t publicly mentioned, but is often talked about in private. The fact that he can really lose his temper and explode, and then minutes later be joking, sharing a TikTok video on his mobile phone.
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Last year Paytm instituted a new ESOP policy. One which would vest over five years, and vesting would be dependent on the employee’s rating being 4 out of 5. Anything below and their shares would not vest.
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A fifth Paytm executive, who left the company early this year, said that it is more complicated than it sounds. He requested not to be named. “What if I work hard in the first three years, but in the fourth year where a major chunk has to be vested, I am distracted,” he said.
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The person in the product team, who left earlier this year, said that Paytm is still a founder-worshipping startup. And that Sharma is surrounded by executives who are now mostly yes men. Where nobody wants to put their future at risk by disagreeing with the boss. Which is exacerbated by the fact that Sharma is famously a micromanager. A believer in the maxim that the smallest things can make a difference, and that if they are out of place, they need his urgent attention.
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Sharma even decides what fragrance the company will use in its office. “This is another quirk of his,” says this person. “If he sees a tap is broken in the toilet, he will go around telling people to fix it. He will decide the fragrance, the tissue papers. And we are all like, leave it to the admin folks, they will figure this thing out, not today, not at your pace, but later.”
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Fragrance is ephemeral. Cultural rot stinks to the high heavens.