HF Group is set to issue 94.27 million shares to be granted to employees under its employee share ownership plan (Esop) that allows them to get up to five percent stake in the firm.
The lender said on Thursday the shares will be issued and listed on the Nairobi Securities Exchange (NSE) following the approval from the Capital Markets Authority (CMA) on November 27 this year.
The new scheme will replace the current employees’ share scheme dated July 2008. HF received approval from shareholders to set up this new Esop during the annual general meeting (AGM) held in May this year and has been awaiting CMA nod.
“The shares will be allotted to the Esop under the company’s incentive programme and in accordance with the Esop Trust Deed,” said HF in a statement.
“Such shares will be issued to eligible employees for such consideration and such terms as is established in the Esop Trust Deed and Rules.”
An Esop is a benefit plan that gives employees an ownership stake in the company —often through shares or stock options designed to retain and motivate staff.
Companies set up a trust to hold and allocate shares based on criteria like tenure or performance.
Esops aim to motivate employees and align their interests with the company's shareholders by providing them with a stake in its success.
The new HF Esop will see eligible employees allotted new ordinary shares with a par value of Sh5 each.
HF shareholders first approved the setting up of a new Esop in May 2023 but lapsed, forcing it to bring the item afresh on the AGM agenda.
The new approval allows HF board to allocate the Esop shares in phases within a period of five years, with a condition that the maximum number of shares held by the Esop shall not at any one time exceed five percent of the issued share capital of the company.
The Esop will see the nominal share capital of the company increase from Sh9.999 billion comprising 1.999 billion ordinary shares of Sh5 each to Sh10.47 billion. The new shares will rank equally with the existing ordinary shares of the company.
HF shares opened Thursday trading at Sh9.52 at the Nairobi Securities Exchange. Companies with stock-based compensation programmes typically issue the shares for free or at a discount to reward the employees as well as encourage participation in the schemes.
Other companies such as Safaricom buy shares in the open market and allot them to staff for free.
HF previously disclosed that the Esop is open to staff who are through with probation and have been confirmed as employees.
