By Alex Muriithi.
Britam Holding Insurance firm,has given 13.3 million shares equal Sh193.8 million to establish its employee share ownership plan.The shares amounts to 0.5% stake are under Bora Services regarding the company’s April data on its regulatory filling ownership structure.
The decision comes after the firm ownership structure has changed significantly after the entry of high-profile investors.Its stock-based compensation was established last year and its implementation is taking place this year the compensation is viewed as a means of aligning the interests of employees with those of shareholders and by owning stock in their company, employees are exposed to the upside and downside of their performance and decisions.
The insurance firm has raised Sh9.2 billion from issuing new shares, equivalent to an 8.8 per cent, and a 14.3 per cent stake to the International Finance Corporation and private equity firm AfricInvest respectively,and it says that the Esop move is meant to motivate and retain staff and is one way of maintaining its high rates in the insurance industry.
However,the Nairobi Securities Exchange said the Esop will be funded by part of employees’ bonuses.“Only 80 per cent of the bonus is paid in cash while the balance is retained and paid in the subsequent three years as deferred bonus,” Britam says in its latest annual report. “The deferred bonus will in due course be used to partly fund the ESOP in which employees will be given shares equivalent to the amount of bonus retained.”