Employees of Equity Bank are set to acquire Equity Bank shares at a heavily discounted price of Sh. 50 cents per share from the current price of Sh. 38.35 per share.

The Equity employees will buy the shares at this price under the proposed stock-based compensation scheme by the bank.

Details of this scheme which has been dubbed as employee share ownership plan (Esops) are contained in a fresh circular to the lender’s shareholders.

They suggest that Equity Bank Group has proposed to issue a total of 198.6 million shares with a current market value of Sh. 7.6 billion to employees over 10 years, subject to approval at its annual general meeting scheduled to be held on June 28.

Out of this valuation though, the employees will only spend an aggregate of only Sh. 99.3 million.

According to the circular, the eligible persons for this venture will employees in Kenya, Uganda, Rwanda, South Sudan, Tanzania and Ethiopia and any additional markets the Kenyan banking multinational may venture into.

It further adds that among the eligible employees will be the group chief executive officer who is currently Dr. James Mwangi, executive director who is currently Mary Wamae, members of middle management, senior officers and officers.

“Qualifying employees will be granted options to purchase units in the Trust at a significantly discounted exercise price of Sh. 0.50 per unit,” the circular to shareholders states.

According to the bank which is currently the most profitable lender in the East African region, these  types of shares will be issued annually, as long as the agreed parameters are met.

“The Esop has been designed as a fit-for-purpose employee share ownership plan which will see Equity Group employees participate in the shared prosperity philosophy, act like owners, and make long-term value-creating decisions every day,” the bank said in its circular.

The shares will then be available for purchase and ownership or sale in the third year after allotment.

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“The Esop will be a share-based long-term incentive scheme to be added to the existing reward mix (i.e. guaranteed pay plus cash-based short-term incentives (annual performance bonus). Since Equity Group is headquartered in Kenya with a primary listing on NSE, the Esop will be administered in Kenya and be governed by the laws of Kenya.”