Equity Bank excites staff with fresh share reward plan

Equity Group Managing Director and CEO Dr James Mwangi at the Equity Centre in Nairobi on Monday, October 25, 2021. PHOTO | DENNIS ONSONGO | NMG

By BRIAN NGUGI More by this Author

Equity Group plans a fresh employee share ownership plan (Esop) as it moves to attract and retain its employees after dropping plans for such a scheme 3 years ago.

Equity Group chief executive James Mwangi said on Wednesday the lender will seek shareholder approval for the scheme whose final details are being discussed.

The bank wanted to allot its workers 205.7 million ordinary shares in 2019 equivalent to five percent of the issued share capital of the company at the time before the plan was quietly dropped.

The actual allotment was however to be subject to approval by the Capital Markets Authority (CMA).

“We have been consulting the shareholders on an employee share ownership scheme so that as employees work for investors and shareholders they will be working for themselves,” said Mr Mwangi during the lender’s 18 Annual General Meeting (AGM).

“I want to appreciate the shareholders who have given us insights as to how to structure that share ownership scheme that meets the aspiration of employees,” said Mr Mwangi.

Esops are offered as part of a long-term remuneration mechanism.

Even though the plans were previously regarded as fringe benefits, they have since been seen as key to attracting, retaining and rewarding employees.

Equity Group whose total number of employees stood at 7,688 as of December says in its latest annual report its employees held 106,225,400 shares equivalent to 2.81 percent of the issued share capital of the company which is valued at Sh4.23 billion based on Wednesday’s price at the Nairobi bourse.

Equity group shareholders yesterday voted to back payment of shareholders a record dividend of Sh11.3 billion or Sh3 per share for the year ended December when its net profit nearly doubled to Sh39.1 billion.

Mr Mwangi downplayed the potential negative impact on the Kenyan economy and the bank’s operations from the upcoming August 9 presidential election, which has heightened investor uncertainty in the market.

bnjoroge@ke.nationmedia.com