Equity Bank plans to allocate an additional 205 million shares worth KSh8.6 billion to its employees through the Employee Share Ownership Plan. The bank’s workers already own 120 million shares of the company currently valued at KSh5 billion.
The top lender has 3.7 billion listed shares at the NSE. The new allotment of 205 million shares will see its employees’ ownership stake rise from 3.25 percent to more than 8 percent. According to the Equity’s company secretary Christine Akinyi, the shares in the ESOP will have the same value as Equity’s ordinary shares.
The additional share allotment is subject to approval by shareholders and the market regulator. Investors will discuss the matter during the annual general meeting on 30th April.
Companies often use Employee Share Ownership plans to motivate their workers and increase loyalty to the business. Kenyan firms that run ESOP schemes include; Safaricom, EABL, KCB Group, Housing Finance, and I&M bank. These schemes are often costly and complex to administer hence most businesses do not use the plans. In 2018, Equity bank was ordered to pay KSh79 million to its former employee in a disputed Employee Share Ownership case.