Housing.com turns Rahul Yadav’s gifted shares to phantom stocks, employees enraged

Employees of Housing.com, who received shares as gift by former chief Rahul Yadav, are enraged as the company is planning to give them those shares in the form of phantom stocks.

Yadav had given nearly 5% of his shares to all its employees. Now, the new management of Housing.com, which is eyeing a strategic stake sale, is giving a phantom stock option.

"Rather than getting physical stock options, the employee receives a documented understanding with the company. The PSU follows the price movement of the company's actual stock, paying out any resulting profits when due,” Housing's chief human resource officer Ajay Nair told employees in an e-mail.

This means Housing.com can retain Yadav’s shares.

Issuing actual shares to all employees would have created tax liabilities for the company and made it a public limited company, they said. Besides, former employees couldn't be issued actual shares, they said, declining to be identified.

"Legally, we cannot redistribute Rahul's shares. The only legally permissible way to provide the intended benefit of Rahul's shares to qualifying employees and ex-employees is through the issue of PSUs,” a Housing.com spokesperson told ET.