The number of shares bought by Safaricom #ticker:SCOM to reward its top executives has jumped to 32.2 million units with a current market value of Sh875 million.
Regulatory filings for July show that an additional nine million shares were bought under the telco’s employee performance share award plan (EPSAP).
Trustees of the scheme have been steadily buying more shares in the open market, increasing their holdings of the stock from 21.8 million units in March.
The shares will be given to senior executives for free as part of their compensation for meeting or exceeding set performance targets.
The company’s chief executive and chief financial officer have traditionally taken most of the stock-based compensation.
Qualifying senior staff were awarded 15.5 million shares with a current market value of Sh421 million in the year ended March.
The employees had cashed out 15.1 million units of stock worth Sh409 million the year before, with the company’s cumulative spending on the share-based compensation scheme standing at more than Sh3 billion.
The Nairobi Securities Exchange (NSE)-listed telco buys its own shares in the open market and allocates them to specific employees who eventually take ownership three years later when they are free to sell the stocks or continue holding them in their personal accounts.
The free shares and Safaricom’s long-term stock price rally has made the company’s share-based compensation one of the most lucrative among NSE-listed firms.
Unlike other employee share ownership plans (Esops), Safaricom’s has not diluted investors since the stocks are bought from the existing pool in the open market.