KenolKobil chief executive Jacob Segman at a past function. The oil marketer intends to award him 20 million shares. Photo/File
KenolKobil group managing director Jacob Segman is set to become one of the top shareholders at the oil marketer if he acquires 20 million shares offered to him under an executive compensation plan.
KenolKobil made the disclosure in its latest annual report in a move that underlines the growing use of shares to reward top executives in Kenya.
“The company has an agreement with the CEO under which he is entitled to receive options for units amounting to four per cent of the company’s shares in respect of the financial years 2010 to 2014 that was issued on May 1, 2011,” says KenoKobil report.
“The direct cost to the group of fulfilling its obligations under the above schemes is charged to the income statement when incurred,” added the oil marketer, signalling the company will foot part or the entire bill.
The KenolKobil shareholders approved the creation of 500,000 million shares on April 28, but the oil marketer is yet to distribute 360 million shares to investors after it issued 140 million stocks to its Employee Share Ownership Plan.
Mr Segman is entitled to four per cent of the new shares or 20 million stocks worth Sh250 million based on the firm’s latest trading price at the Nairobi Securities Exchange.
The shares would turn Mr Segman the eighth largest investor in KenolKobil — Kenya’s largest company on revenues, which is associated with former powerful cabinet minister Nicholas Biwott.
This is based on assumption that Mr Segman does not own significant shares in the company.
KenolKobil, unlike most public companies, does not list the number of shares or shareholding held by its directors in its annual report.
Mr Segman did not respond to several requests for an interview.
Star performers
Human resource experts said use of share options to compensate executives was rising, especially in the banking sector where the need for talent has sparked a scramble for star performers.
“Companies want executives to take a long-term commitment to a company’s health from which they stand to gain,” said Mr Kimani Njoroge, a human resource partner at Deloitte Eastern Africa, adding that the incentive also helps shareholders to share risks with executives.
Barclays Bank Plc allotted directors of its Kenyan subsidiary shares worth Sh6 million in 2009 and 2010 while Family Bank’s managing director Peter Munyiri was offered a one per cent stake in the lender at a discounted price.
Mr Segman would be one of the top beneficiaries should Puma Energy succeed in buying all stocks in KenolKobil and he exercise his rights to acquire the 20 million shares before the takeover deal is complete.
Puma Energy said it would mull over making a take-over of KenolKobil after acquiring a majority stake in the Nairobi Securities Exchange-listed oil firm.
The company grew its net profit by 71 per cent for the year ended December to Sh3.2 billion on the back of increased sales as its rival Total Kenya incurred losses--earning Mr Segman credit from the board.
