Equity Bank plans fresh Sh7.6bn staff share reward scheme
Equity Group has revived its employee share ownership plan (Esop) in a move to retain and attract staff as it lines up the distribution of 198.6 million shares worth Sh7.6 billion in the next 10 years.
The lender made a last-minute ditch of a similar plan four years ago, which would have seen the allotment of 205.7 million shares to employees in 2019.
Equity’s board has asked shareholders to approve the creation of additional shares to anchor the Esop at the annual general meeting on June 28.
“The board of directors of the company is recommending the establishment of an employee share ownership plan for the benefit of employees of Equity Group,” the lender said in a notice of its 19th AGM Tuesday.
The newly created shares will total five percent of the company’s share capital. This will increase the maximum share capital of the Group to Sh1.986 billion from Sh1.886 billion at present.
The directors of Equity will be at liberty to allot and issue the additional shares in tranches and on terms and conditions they deem fit.
They will, however, seek the renewal of the approval of the shareholders to allot and issue the new shares, which remain unissued at the expiry of five years.
Among the staff set to benefit from the allotment is the Group chief executive James Mwangi.
At the 2019 AGM, the shareholders had been expected to approve a similar Esop plan, but the resolution was withdrawn during the meeting at the last moment, with no explanation given for shelving it.
Staff at the bank would have been allotted 205.7 million shares valued at Sh8.4 billion at the time.
The new Esop will be the second for the bank, which first established a stock-based compensation scheme ahead of its listing on the Nairobi Securities Exchange (NSE) in 2006.
Esop is an employee benefit plan that gives workers ownership interest in the company through shares.
Esops are regarded as fringe benefits to boost staff productivity, reward, retain and attract employees.
The Esops are subject to the approval of the Capital Markets Authority (CMA).
The shares are often made available to employees as an award mechanism at no cost or at a discounted rate.
As of March 2021, the CMA says it had approved 14 Esops.
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