E-commerce major Snapdeal will shell out an average pay hike of 12-15 per cent as it looks to assure employees amid the online marketplace scouting for a potential buyer.
According to sources, the pay revision will be effective from April 1 and will see salaries of employees at the mid and junior-level go up by an average 12-15 per cent.
For senior management, the hike will be 9-12 per cent, but the company may offer 20-25 per cent raise to exceptional performers, they added.
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The cash-strapped company is also believed to be distributing nearly 1 per cent of its stock to about 150 employees.
Earlier this year, the company's founders had admitted to have made mistakes and said they would take a "100 per cent cut" in their own salaries.
The decision to give such a good pay hike has been taken at a time when Snapdeal's largest investor SoftBank is believed to be working towards sale of the e-commerce platform and a final decision is likely to be made in the next few weeks.
The top contender in the race is Flipkart, which has recently received a funding of $1.4 billion.
Softbank is also in talks with Kalaari Capital and Nexus Venture Partners, who have representation on the board of Snapdeal, to reach a consensus on valuation, sources said.
Snapdeal's seven-member board includes representation from investors SoftBank, Kalaari Capital and Nexus Venture Partners, as well as co-founders Kunal Bahl and Rohit Bansal.
The company has about 3,000 people in its e-commerce operations. The company also has mobile wallet (FreeCharge) and logistics (Vulcan) operations.
The sources said about 3,000 of Snapdeal's current and ex-employees hold 5-6 per cent of the company stock in the form of Employee stock options (ESOPs).
Speculations are rife that Alibaba-backed Paytm is also in the fray as a potential buyer. Alibaba is also a shareholder in Snapdeal.
So far, Snapdeal and SoftBank have not made any comment on the speculations of sale.
Snapdeal co-founders Kunal Bahl and Rohit Bansal, in a recent letter to employees, had indicated that the company's investors are "driving the discussions around the way forward".
If Snapdeal does get sold to Flipkart, it would mark the biggest acquisition in the Indian e-commerce space and change the landscape of the sector that is witnessing intense competition among players.
Sources have said one of the hurdles is valuation as Kalaari Capital and Nexus Venture Partners have not agreed on the valuation given by SoftBank.
Snapdeal was valued at $6.5 billion in its last funding round in February 2016. The valuation has also shrunk since then and the potential deal could be struck at a discounted rate.
Cash-strapped Snapdeal, over the last few months, has had to trim its workforce significantly and shut down non-core businesses. Earlier this year, Snapdeal laid off about 600 people.
Indian e-commerce companies have seen funding dry up over the last few months as investors are focussing extensively on profitability and rationalisation of expenses.
With intense competition from deep-pocketed global rivals like Amazon, companies like Flipkart and Snapdeal could face more heat in coming days.