Equity group investors rejected an Employee Share Ownership Plan that would have given workers at the institution an additional 205.7 million shares worth KSh8.6 billion. The regional lender announced the plan to provide employees with shares in April.
The issue of new shares to employees through an ESOP may lead to the dilution of existing shares; a possible reason why Equity shareholders rejected the plan. Employee Share ownership plans are also expensive to manage.
The plan was supposed to be discussed during the bank’s annual general meeting but that did not happen. According to the Business Daily, the decision to drop the scheme was made at board level.
Equity Bank already runs an Employee Share Ownership Scheme that was established in 2006. Through the employee reward program, the bank’s CEO James Mwangi managed to rapidly grow his investment in the bank to the current level of ownership.
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