Unacademy Slashes ESOP Exercise Window For Former Employees To 30 Days
Unacademy emphasised that this amendment is a one-time opportunity for former employees to achieve parity with equity shareholders.
Educational technology company Unacademy has amended its Employee Stock Option Scheme (ESOS) 2018, reducing the exercise period for former employees from 10 years to just 30 days, according to an employee who posted an email sent by the company on X.
The edtech unicorn, operated by Sorting Hat Technologies Pvt. Ltd., said the changes were made based on legal advice and in compliance with its constitutional documents and applicable laws.
Under the revised policy, employees who have left the company will now have a one-time 30-day window from the effective date of the amended ESOS 2018 to exercise all vested options. Previously, former employees could exercise their vested options within a decade of leaving. The company said the move aims to "ensure parity" between former and current employees.
Unacademy emphasised that this amendment is a one-time opportunity for former employees to achieve parity with equity shareholders. Exited employees have until January 19, 2026, to act on this offer.
“The Board has agreed to provide a one-time 30-day window from the effective date of Amended ESOS 2018 to enable exited employees to exercise all their vested options,” the email stated. The exercise price remains Rs 0.00042 per option, but Unacademy cautioned that exercising options will trigger immediate tax liability under Indian laws.
"Got an email from my ex employer @unacademy today saying our exercise window has been changed from 10 years to 30 days forcing us to cough up a huge amount to pay taxes or forfeit our vested esops. @gauravmunjal this is an awful thing to do. Makes the startup industry look bad," the user posted.
He tagged CEO Gaurav Munjal in his post. There was no immediate comment from Munjal.
The company’s latest valuation stands at approximately Rs 2,650 crore, based on a formal merchant banker assessment. Despite this, the email warned that equity shares in a private limited company are illiquid and carry risks, including no guaranteed payout during a liquidation event, as preference shareholders hold superior rights.
Unacademy started as a YouTube channel in 2010. It launched an app in 2015.
Employee Stock Option Plans (ESOP) is a widely adopted methodology used by modern startups during their initial stages. It plays an important role in attracting and retaining talent for startups.
Once the employee has fulfilled the conditions or the relevant time period has elapsed, these employee stock options are vested. At this time, the employee can opt to buy them, and they are often offered lower than market price (exercise price).
ESOPs are taxed at two stages in the hands of the employee: at the time of exercise as a perquisite (salary income), and at the time of sale as a capital gain.
