Kenya Airways is set to issue 142.1 million shares currently worth Sh1.4 billion to its staff for free, reinstating its suspended employee share ownership plan (Esop).
The new shares have been created but are yet to be issued, with the Nairobi Securities Exchange-listed national carrier still working on rules to govern the scheme.
“The formation of the scheme was approved at the extraordinary general meeting of the company held on August 7, 2017. Accordingly, the directors allotted 142,164,558 shares to the scheme for zero cash consideration,” the airline, known by its international code KQ, says in its latest annual report.
“Under the scheme, eligible employees may be granted shares at the discretion of the directors for no cash consideration upon the satisfaction of various conditions as determined by the directors from time to time.”
The move means the employees will automatically book a profit once the stocks are credited in their accounts, making KQ’s one of the most generous Esops. Most other listed firms running stock-based compensation schemes require their workers to buy the shares at a discount.
Free shares are usually issued to high-performing employees, mostly managers and senior executives, who oversee teams and are in charge of crafting and implementing corporate strategies.
The KQ staff shares are held by Trustees of the Kenya Airways Employee Share Ownership Scheme 2017, “a trust set up for the purpose of incentivising certain employees through issuance of shares to employees as part of their remuneration package.”