Equity Group wants to give its employees an additional Ksh8.6 billion ownership of the Ksh150 billion company. The matter will be up for discussion as special business at the Group’s Annual General Meeting (AGM) on April 30.
Set to convene at 10am at the Kenyatta International Convention Center (KICC), the AGM will discuss the establishment of an Employee Share Ownership Plan (ESOP), subject to regulatory approval.
Equity Group also intends to allot 205.7 million shares to the ESOP, amounting to 5% of the issued share capital of the company.
According to Equity’s company secretary Christine Akinyi, the ESOP allotted shares will rank at the same rate as the firm’s ordinary shares.
This means that at a current share price of around Ksh42.05, Equity Group employees will be offered a shareholding worth Ksh8.6 billion.
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With employees already holding 3.25% of the company’s issued share capital, the recommended plan, if approved, will raise ESOP’s holding in the company to 8.25%.
The initial shareholding, which is worth around Ksh5.1 billion worth of the company, will see employees’ investment wealth in Equity jump to around Ksh13.8 billion
Equity Bank is worth around Ksh150 billion, having listed 3.7 billion shares on the Nairobi Securities Exchange.
The ESOP is sometimes used by firms to appreciate employees by awarding them shares in the company, as well as maintain employee loyalty.
At the same time, the Group’s 15% AGM has been asked to declare “a first and final dividend for the year ended December 31, 2018 of Ksh2, payable on May 31 net of withholding tax to shareholders on the register as at the close of business on April 29.”
With Equity having issued around 3.7 billion shares, the final dividend to shareholders will be worth around Ksh7.5 billion.
Retiring board member Peter Munga will, on the other hand, be given a send off package worth Ksh50 million.
Dr Munga, who founded the lender as a building society in 1984, is being afforded the gratuity for his time at the company and his input.
“In consideration of his length of service, commitment and dedication to the company which spans over 35 years,” Equity said in a notice to shareholders.
The Group had recorded a 4.8% growth in net profit to Ksh19.8 billion for the full year ended December 31, 2018.
Source: Business Today