Paytm's Vijay Shekhar Sharma May Not Be Eligible For Stock Options: Report

While Vijay Shekhar Sharma isn't classified as a promoter, he has rights akin to one, including a potential permanent seat on the board, a report said.

Paytm may be circumventing regulation to grant employee stock options to founder and Chief Executive Officer Vijay Shekhar Sharma, according to proxy advisory firm Institutional Investor Advisory Services.

While Mr Sharma isn't classified as a promoter - Indian parlance for controlling shareholder - he has rights akin to one, including a potential permanent seat on the board, IiAS said in a note Friday. 

"These provisions and structures give Vijay Shekhar Sharma 'entrenchment' similar to that enjoyed by promoter families in the more traditional companies," IiAS said.

It added the regulator must examine Mr Sharma's move to pare his direct stake by transferring equity to a family trust, barring which he wouldn't be eligible for the Employee Stock Option Plan.