Stock decline hurts HF’s share-based pay scheme

Robert Kibaara
HF Group CEO Robert Kibaara. FILE PHOTO | NMG 

Mortgage lender HF’s #ticker:HFCK stock rout on the Nairobi Securities Exchange (NSE) has hurt its share-based compensation scheme which became unprofitable after the market price fell below the offer price.

The adverse share price movement has seen employees shy away from participating in the lender’s employee share ownership plan (Esop).

HF says in its latest annual report that employees took up just 120,000 shares or 15 percent of the 775,000 units that were available to them in the year ended December, leaving the remainder (655,000) to lapse unexercised.

HF offers its workers the Esop units at Sh10 apiece, with the stock last trading above the Sh10 level in May last year —with a 2018 high of Sh11.15.

Following the limited uptake last year and lapse of the remaining units, HF now has no outstanding Esop shares. The lender also did not grant any new units in the review period. The total number of shares approved under the Esop amount to 5.75 million units.


“Options may be exercised at the price of Sh10. The trading price of (the) HF Group share as at December 31, 2018 on the NSE was Sh5.54 (2017 -Sh9.25). All Nil (2017–775,000) outstanding shares were exercised as at December 31, 2018,” said the lender in the report.

HF’s share shed 41 percent last year, making it one of the worst hit among banks in a year when many stocks slid in the market. It was trading at Sh4.30 yesterday, coming off an all-time low of Sh4 per share seen at the beginning of this month.