Equity Bank Group MD James Mwangi (right) with the bank’s Kenya chief Polycarp Igathe at a past event: Its AGM is planned for April 30. FILE PHOTO | NMG
Tier-One lender Equity Bank #ticker:EQTY has asked its shareholders to approve an employee share ownership plan (Esop) in the next annual general meeting (AGM).
If approved it will become the 15th Esop among Kenya's listed companies. The last firm to have its employee share plan approved by the CMA was Britam.
The proposal by Equity Group was revealed in a notice for the bank’s AGM which is scheduled for April 30 in Nairobi. Shareholders are to make the decision during the AGM.
Tier-One lender Equity Bank #ticker:EQTY has asked its shareholders to approve an employee share ownership plan (Esop) in the next annual general meeting (AGM).
The bank wants to allot its workers 205.7 million ordinary shares which are worth Sh8.6 billion on the basis of yesterday’s price at the Nairobi bourse. The shares are also equivalent to five percent of the issued share capital of the company, but the actual allotment will also be subject to approval by the Capital Markets Authority (CMA).
If approved it will become the 15th Esop among Kenya's listed companies. The last firm to have its employee share plan approved by the CMA was Britam.
The proposal by Equity Group was revealed in a notice for the bank’s AGM which is scheduled for April 30 in Nairobi. Shareholders are to make the decision during the AGM.
“Notice is hereby given that the 15th AGM of Equity Group Holdings Plc will be held Tuesday April 30, 2019 … [under] special business to consider and if found fit, to pass a special resolution approving, subject to regulatory approval, the establishment of an employee share ownership plan (Esop) and the issuance and allotment to the Esop of 205,709,834 shares amounting to five per cent of the issued share capital of the company,” said the notice.
The notice comes only weeks after the company released its financial results for the year 2018 which showed that the banking group increased its post-tax profit by 4.8 percent to Sh19.8 billion.
Mid last year, Kenya Airways also revealed that it planned an Esop of 142.1 million shares. However, nothing has been heard about it since the airline mentioned it in its annual report last year.
Esops are offered as part of a long-term remuneration mechanism. According to a survey by US-based Employee Ownership Foundation, such plans improve employee productivity with a high potential to raise a company’s profitability.
Even though the plans were previously regarded as fringe benefits, they have since been seen as key to attracting, retaining and rewarding employees.
A major disadvantage cited, however, is the complexity of its administration — because it requires establishing rules and a trust to run it — compared to cash incentives, a characteristic that make Esops typically expensive to provide
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