GoKwik staff could lose vested ESOPs if they join any of 9 rivals, including Razorpay and CRED
An Inc42 investigation found the checkout startup added a non-compete clause to its stock option plan that lasts two years after an employee leaves.
- Rivals named: 9
- Lock-in after exit: 2 years
- Layoffs earlier this year: ~120
What the clause says
GoKwik amended its ESOP Plan 2021 to name nine companies: Razorpay, Shiprocket, CRED, Cashfree, Pine Labs, Shopflo, BiteSpeed, Snapmint and WebEngage. If the board decides an employee has joined a competitor, it can cancel both unvested options and vested options not yet exercised. The rule applies for two years after someone leaves, and staff were told in August that it covers existing grants.
The reaction
Lawyers told Inc42 that naming competitors in an ESOP plan is unusual, and changing terms after grants could be challenged. GoKwik did not answer Inc42's questions; it put out a release saying its ESOPs have given 9x average returns and that it turned EBITDA-positive in October. The startup has raised $68 million and laid off about 120 people earlier this year.
