Board passes resolution for ESOP’s implementation at Emergency AGM

The Jamaica Stock Exchange Limited (JSE) has announced plans to roll out an Employee Share Ownership Plan (ESOP) sometime next year.

This is being done as a means of motivating staff and incentivising them for good performance. The JSE, which regulates Jamaica’s equities market, has becomes the latest company to announce the implementation of an ESOP.

The move comes one month after stockbrokerage and investment company, Barita Investments activated its billion-dollar ESOP with the purchase of a huge block of shares for the staff incentive programme. An ESOP refers to an employee benefit plan which offers employees an ownership interest in the organisation.

Employee stock ownership plans are issued as direct stock, profit-sharing plans or bonuses and the employer has the sole discretion in deciding who could avail of these options.

In an effort to move forward with its ESOP implementation, the JSE saw its shareholders at Tuesday’s Extraordinary General Meeting approving the idea for implementation.

MOMENTUM OF ESOPs SLOWED DURING MID 1990s

The shareholders passed a resolution which read: “That the Board of Directors is authorised to adopt a share option plan to be known as the ‘2021-2031 Share Option Plan for Employees’ hereinafter referred to as ‘the Plan’ pursuant to which options over shares in the Company may be granted to employees in accordance with the rules of the Plan.”

ESOPs were introduced to Jamaica by the Michael Manley Government of 1989 and quickly gathered momentum as a means of giving ordinary Jamaicans the opportunity to own shares in their place of work. However, the momentum slowed during the mid 1990s coming into the new millennium.

Last month, Barita, which also trades on the JSE, purchased 10 million shares which at current market price of $100.49 per share are worth just over $1 billion. The acquisition of the shares was, however, conducted at a price of $101.97. It will facilitate the grant of share options to Barita’s team members.

Barita says the staff incentive plan is being executed as a means of motivating staff, given the two successful capital raises by the company in the past year, as well as its stellar financial performance, particularly in the past two years.

Barita had gone to the local capital market with two successful additional public offers which raked in $13.5 billion in the first instance and $10.78 billion in subscriptions in the second.