KenolKobil #ticker:KENO has paid its former CEO Jacob Segman millions of shillings, settling a long-standing compensation dispute that had seen him claim more than Sh300 million from the oil marketer.
A source familiar with the matter, who did not want to be named in order to speak candidly, told the Business Daily that Mr Segman was paid in the fourth quarter that ended in December 2017.
“Mr Segman was paid in cash. This settles his entitlements under the employee share ownership plan (Esop),” said the source who did not reveal Mr Segman’s exact payout.
KenolKobil is expected to disclose the amount paid to the former CEO in its 2017 annual report as part of more detailed pay disclosures mandated by the Companies Act.
Current KenolKobil CEO David Ohana refused to comment on the matter when asked.
The compensation to Mr Segman came after the oil marketer disclosed in its 2016 annual report that it had offered its staff an opportunity to acquire shares valued at Sh386.1 million through an Esop.
The Esop reserve had risen from Sh50.7 million in 2015, with the latest provision ranking as one of the highest in recent years.
Weeks before paying Mr Segman, KenolKobil had gone to court seeking a determination as to whether it was legal for the former executive to exercise his share options.
The legal action indicated a standoff over Mr Segman’s outstanding claims at the time but which have since been dispensed with in the cash settlement.
Mr Segman left KenolKobil in July 2013, three months after announcing a record net loss of Sh6.2 billion for the year ended December 2012. The oil marketer had structured currency hedges which turned against it to the tune of Sh4.6 billion, contributing to the loss.
Mr Segman, who had served in the position for 23 years, was succeeded by Mr Ohana.
The Esop’s trustees said in their court application that the former CEO’s contract allowed him to exercise his shares — at one time standing at 20 million units — up to three years after leaving the company.
The trustees said the opportunity had closed by the time Mr Segman communicated his intention to take up the shares on April 26, 2017, nearly four years after his departure from the oil marketer.
Mr Segman’s contract allowed him to acquire at least four per cent of the total issued share capital between 2007 and 2010.