One of the special resolutions that was to be put to a vote at the AGM was the establishment of an Esop that would hold 205.7 million shares equivalent to a five percent stake in the lender.
The matter was, however, ignored while the meeting approved other issues on the agenda including a final dividend of Sh2 per share and payment of a one-off gratuity of Sh50 million to founder and former chairman Peter Munga.
A source familiar with the matter told Business Daily that the decision to suspend the Esop was made by the board prior to the AGM.
Equity Group’s #ticker:EQTY bid to implement a Sh8.4 billion employee share ownership plan (Esop) was snubbed at the lender’s annual general meeting (AGM) Tuesday, indicating that the scheme did not receive the backing of a section of significant shareholders.
One of the special resolutions that was to be put to a vote at the AGM was the establishment of an Esop that would hold 205.7 million shares equivalent to a five percent stake in the lender.
The matter was, however, ignored while the meeting approved other issues on the agenda including a final dividend of Sh2 per share and payment of a one-off gratuity of Sh50 million to founder and former chairman Peter Munga.
A source familiar with the matter told Business Daily that the decision to suspend the Esop was made by the board prior to the AGM.
Publication of the proposed scheme and its quiet withdrawal is a signal that not all significant shareholders were consulted to establish support for the scheme.
Equity’s notable shareholders include Arise B.V, an investment firm backed by a group of institutional investors including Norfund and which is the top shareholder with an 11.99 per cent stake.
Had the scheme been implemented, senior managers including chief executive James Mwangi would have acquired most of the shares.
This would have been the second Esop for Equity which first established a stock-based compensation scheme ahead of its listing on the Nairobi Securities Exchange (NSE) in 2006.
The Esop saw employees including Mr Mwangi acquire a 5.5 percent stake that has dropped to the current 3.08 percent equity as some staff cashed out their holdings.
While the second Esop was struck off the agenda at the last minute, Mr Munga’s exit compensation was approved unanimously.
The billionaire businessman told shareholders how he invested Sh5,000 to establish the company 35 years ago in Kangema, Murang’a County with the help of 12 friends including investment banker Jimnah Mbaru, Britam’s CEO Benson Wairegi and the late John Mwangi.
Mr Munga said he will now focus on his ventures in agriculture, manufacturing and education.
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