EMPOWERMENT VOTE
Absa shareholders green-light R10-billion B-BBEE deal as share prices plummet
The broad-based black economic empowerment transaction involves 7% of the total Absa Group shareholding, comprising 3% for South African staff and 4% for black participants in selected CSI programmes.
Shareholders approved Absa’s R10-billion broad-based black economic empowerment (B-BBEE) deal at an extraordinary general meeting last week, paving the way for black ownership of the bank to push the 25% envelope.
The deal value (R11.2-billion in April this year) highlights how the bank’s share price has fallen over the past three months, plummeting 21% from a high of R199.50 on 6 March to close at R158.23 on Monday.
Hopefully, the price will pick up by the time employees and participants in Absa’s corporate social investment programmes become shareholders.
The deal is structured so that employees in other countries where Absa has a presence will have the opportunity to participate through cash-settled plans, subject to local approvals. Half of the transaction will be for the benefit of participants in corporate social investment (CSI) programmes.
Group chief executive Arrie Rautenbach says the B-BBEE transaction involves 7% of the total Absa Group shareholding, comprising 3% for South African staff and 4% for black participants in selected CSI programmes.
Absa anticipates that the SA staff scheme will be implemented on 1 September 2023, allowing thousands of Absa employees to become shareholders when the shares vest five years from the implementation date – or in September 2028.
On implementation of the transaction, Absa will also allocate shares to a CSI Trust which will distribute its significant dividend income to its beneficiaries, who will be mainly black participants in CSI programmes that focus on education and youth employability.
Absa Group broad-based black economic empowerment programme beneficiaries
(Image: Supplied by Absa)
The SA staff scheme will include about 26,000 eligible permanent staff members of Absa Group companies in South Africa, regardless of race or nationality.
However, the SA staff scheme will be structured to enhance the participation of 20,500 eligible South African black (African, Indian and coloured) staff members who will receive an additional 20% allocation relative to staff who are not black, which means about 82% of the SA staff scheme will benefit black staff. DM
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Its what happens when you give hard earned money (mostly other peoples- your customers- remember them? ) to the BEE money pit.
under what logic is a portion of a domestic BEE obligation allocated to non SA staff?
These programs must create enormous HR problems when Johnny pockets an extra R100k, but Mary that does the exact same job, goes without. You cannot justify these programs to 30y staff at all, or I’d like to hear how. Also, who decides which applicants are not-white-enough to qualify? We have no national race register and on a DNA test I would venture most South Africans are mixed ancestry.
We need to move on or be left stuck in a racial divide.