HF plans 19m shares for staff in compensation schemeThursday May 04 2023
Mortgage financier HF Group is set to issue an additional 19.2 million shares to be used to reward its staff under its employee share ownership plan (Esop).
The proposal, contained in a special resolution to be considered at its May 26 annual general meeting, will raise the volume of its outstanding shares to 403.8 million from the current 384.6 million.
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“That subject to receipt of requisite regulatory approvals, the directors be generally authorised to allot new ordinary shares of Sh5 each not exceeding five per cent of the total issued share capital of the company to the Employee Share Ownership Plan (ESOP) for such consideration and upon such terms and conditions as the directors may determine,” said HF Group in the annual general meeting notice.
The company had previously been issuing shares to qualifying employees at a price of Sh10 each with such a transaction recorded in 2019 when the mortgage financier issued 120,000 shares under the Esop.
HF’s share price has, however, traded below the Sh10 mark since the start of 2020, according to market data.
The stock closed at Sh3.91 on Wednesday, rising 5.1 percent from Sh3.72 on Tuesday.
Companies with stock-based compensation programmes typically issue the shares 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.
The eligible staff are to pay for the units in cash at a price determined by the firm in full or in instalments until the price is paid in full.
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The listed firm also said the unit holder is not allowed to sell, transfer or otherwise dispose of the units registered in his name to another unit holder or any third party whatsoever.