The Capital Markets Authority of Kenya has approved ARM Cement to give the employees of the Cement maker an ownership stake in the company through the Employee Share Ownership Plan (ESOP).
In its AGM held last month, ARM Cement board and shareholders approved the creation and issuance of 21 Million new ordinary shares under ESOP.
“The allotment of the ESOP shares was waiting regulatory approval which ARM has now obtained” Read a statement sent through the Nairobi Securities Exchange on Tuesday Morning.
Due to the creation of these new shares under the Employee share Ownership Scheme (ESOP), the issued share Capital of the company has increased from Ksh 495,275,000 to Ksh 516,275,000 with each share at Ksh 1.
Other Nairobi Securities Exchange listed companies that have given their employees an ownership stake include; Kenya Airways, East African Breweries,Equity Bank,KCB Group, Scangroup, Safaricom, Kenol Kobil, Nairobi Securities Exchange and Housing Finance.
ESOP’s allow companies to compensate workers by allowing them to buy the company shares at a discounted price.
Here at Kenyan Wall Street we think that this is better than a bonus or a raise because an employee is getting a piece of this thing they have helped build. ESOPs enable companies to retain employees because these are long-term compensation methods, with loyal employees able to benefit particularly if the shares appreciate.
The allotment will be conducted by the company’s registrar and the ESOP shares will be quoted and listed on the official list of the Nairobi Exchange.