Staff of Barclays Bank of Kenya #ticker:BBK will soon be given an opportunity to acquire shares in their parent company Barclays Africa Group as part of the Johannesburg-based firm’s employee share ownership plan (Esop).
The announcement was made last Friday in Johannesburg by the multinational’s executives including deputy CEO Peter Matlare.
“We want employees to have skin in the game,” said Songezo Zibi, Barclays Africa’s head of corporate communications.
The offer will be made to all employees working in the various subsidiaries including Ghana, Uganda and Zambia, Mr Zibi said.
The share-based compensation scheme will be rolled out as soon as agreements with tax and banking regulatory authorities are concluded.
This will mark a rare Esop where a broad base of subsidiary employees are allowed to acquire stock in their parent firm.
Such offers have been limited to top executives including those of Barclays Bank of Kenya and Standard Chartered Bank (Kenya) #ticker:SCBK who have acquired shares worth millions of shillings in their parent companies in the past years.
Employees who will participate in the Barclays Africa Esop will see their returns influenced by the company’s financial performance and how that is baked into the share price.
Exchange rate volatility will also weigh in on the returns, with the Pan African business listed on the Johannesburg Stock Exchange where its stock is quoted in South African Rand.
The planned Esop is part of the new strategies by Barclays Africa in which London-based Barclays Plc has relinquished control after selling down its stake in June.
Barclays, which is also set to pull out its brand from the pan-African banking business in the short term, reduced its stake from 62.3 to 23.4 per cent.
The multinational has agreed to sell a further seven per cent equity in Barclays Africa to South Africa’s pension fund Public Investment Corporation.
The planned Esop is meant to align the interests of employees with those of shareholders.
Owning stock in companies they work for exposes employees, including executives, to the upsides and downsides of the decisions they make and ultimately what they earn from their ownership.
Firms running Esops have traditionally offered staff shares at a discounted price to encourage their participation in the schemes.
Others have issued top-performing staff shares for free.
Esops typically tie down employees for a few years before they can cash in their entitlements as part of companies’ staff retention strategies.