- The value of shares held by employees in East African Breweries Limited (EABL) has experienced a significant drop of Sh340.6 million, leading to concerns among staff and shareholders alike.
- EABL’s Employee Share Ownership Plan (Esop) has been affected by the decline, with the value of shares falling based on present versus acquisition cost.
- The company’s annual report for 2023 reveals that EABL acquired 3.82 million shares under the Esop at a cost of Sh836.8 million, equivalent to an average of Sh219.22 per share.
- However, the market value of these shares, based on the company’s recent closing price of Sh130 per share, stands at Sh496.2 million, resulting in a significant decrease in value.
- EABL attributes the decline in share value to the fall in the company’s share price over the past three years.
- During the reporting period, EABL added 224,735 shares to the Esop at an average cost of Sh160 per share, while employees exercised their option on 27,332 shares, valued at Sh4.37 million.
- Employee Share Ownership Plans are considered fringe benefits aimed at boosting staff productivity, retaining and attracting talent. The decline in share value raises questions about the effectiveness of the plan and its impact on employee motivation and retention.
The sharp drop in EABL staff shares’ value has raised concerns about the company’s performance and the impact on employee morale and engagement. The declining trend in share prices and the subsequent implications for employees participating in the Esop warrant further examination and analysis.