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Newsunplug Kenya > Blog > Business > Safaricom managers awarded Sh302 million free shares
Business

Safaricom managers awarded Sh302 million free shares

hallanaija
Last updated: July 13, 2023 4:01 pm
hallanaija 2 years ago
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Safaricom
Safaricom PLC Chief Executive Officer (CEO), Peter Ndegwa at a past event. FILE PHOTO | POOL
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Listed telco Safaricom rewarded its senior managers with 15.3 million shares worth Sh302 million at current market value in the year ended March 2023 as compensation for their past performance.

The company says in its 2023 annual report that the number of shares vesting to qualified staff remained unchanged compared to the previous year.

Under the employee performance share award plan, Safaricom buys its own shares in the open market and allocates them to specific employees, who take ownership after a three-year vesting period when they are free to sell or continue holding the stock in their personal accounts.

The shares form part of the compensation due to the staff for meeting or exceeding performance targets.

“During the year, 12.4 million shares were bought by the Trust, at a cost of Sh489.4 million (2022:12.4 million shares at a cost of Sh489.4 million). Additionally, 15.3 million shares historically valued at Sh519.4 million (2022: 15.3 million shares valued at Sh519.4 million) vested and were exercised by eligible staff,” said Safaricom in the report.

Safaricom
Safaricom PLC Chief Executive Officer (CEO), Peter Ndegwa at a past event. FILE PHOTO | POOL

“The trust currently holds 11.5 million shares at a total cost of Sh416.2 million (2022: 11.5 million shares at a cost of Sh416.2 million).”

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The free shares and Safaricom’s long-term stock price gains recently have made the company’s stock-based compensation one of the more lucrative among the country’s publicly-traded firms.

The beneficiaries who continue to hold their shares after vesting also benefit from dividends paid out annually by the company, whose payout policy normally sees it distribute about 80 percent of its net profits every year to shareholders.

The telco’s share traded at Sh19.7 a unit on Wednesday, continuing its mini-rally from the eight-and-a-half-year low of Sh13 per share recorded in mid-May.

This is still well below the record highs of Sh45 per share that were seen in August 2021, when it was boosted by investor enthusiasm after a Safaricom-led consortium won a telecommunications licence in Ethiopia.

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