Money Markets
A KCB banking hall. The bank will sell 40 million shares to staff under Esop. PHOTO | FILE
By CHARLES MWANIKI, cmwaniki@ke.nationmedia.com
In Summary
- The stock is part of the 150 million shares that shareholders of the Nairobi Stock Exchange (NSE)-listed lender approved for issue to staff in 2008.
- The company did not disclose the price at which it would offer the employees the shares, but going by the Sh20.04 price of the last two Esop issues, the employees may be looking at more than doubling their share values on listing.
KCB
has received approval to issue and list an additional 40 million shares
under its employee share ownership plan (Esop) at a time the lender’s
stock is trading at an all-time high of Sh54.
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The stock is part of the 150 million shares that
shareholders of the Nairobi Stock Exchange (NSE)-listed lender approved
for issue to staff in 2008.
The company did not disclose the price at which it
would offer the employees the shares, but going by the Sh20.04 price of
the last two Esop issues, the employees may be looking at more than
doubling their share values on listing.
“The CMA has granted approval to Kenya Commercial
Bank Esop for the issue and listing of an additional 40,985,300 ordinary
shares of Sh1 each to the trustees of the plan,” said KCB in a
statement.
KCB reported in its 2013 annual report that Esop
shares worth Sh13.9 million were bought by its employees last year at an
average price of Sh20.04.
In 2012, the employees had exercised their option
on 1.59 million shares at the same price. Employees are keener to take
up their discounted shares when a stock is doing well in order to
realise the capital gains.
In 2012 when the share opened the year at Sh16 and
only appreciated towards the end of the year to Sh30, employees
forfeited Esop shares worth Sh24.8 million, compared to forfeitures of
Sh12.5 million last year when the stock traded between Sh31 and Sh47.
The popularity of the Esop has been growing in
recent years. The shares are seen as a reliable way of reducing employee
turnover while motivating workers in a market where competition for top
talent is getting tighter.
However, some of the plans only allow employees to
take up the benefit after working for a period of time, therefore tying
benefit to loyalty.
Some of the blue chips that have implemented Esop include East Africa Breweries (EABL), KenolKobil, ARM Cement, Scangroup, Safaricom and Equity Bank.
National Bank of Kenya
indicated in May its intention to offer an Esop but the resolution was
voted down by the lender’s shareholders, whose holdings stood to be
diluted.
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