A missed opportunity…
In 2015, while raising his national dialogue on poverty, President Hage Geingob encouraged the private sector to rethink its ownership structures by introducing employee share option schemes. This was before the spectre of the New Equitable Economic Empowerment Framework (NEEEF) had truly unhinged business owners.
“Empowering workers through shareholding will not only create a sense of belonging, but will also act as an incentive for workers to be more productive, as they will now be working for themselves and share in the wealth created by the company through dividend payments,” Geingob said at the time.
It remains unclear whether this clarion call was truly taken heed of, and to what degree plans and actions have been forthcoming with regard to employees owning a piece of the companies they work for. What we do know is that in February 2016, Standard Bank Namibia secured a N$180 million loan from the International Finance Corporation that was used to purchase 10% shareholding in the bank for between 1 400 and 1 500 employees. Other banks have also given employees an option to buy company shares.
In terms of financial institutions, this should be seen in the context of the Bank of Namibia giving foreign-owned banks until the end of 2019 to comply with requirements that locals should hold at least 25%.
Since then, these kinds of employee share scheme initiatives have not hit the headlines.
Globally, employee share schemes are seen as a tool that can motivate employees to become more productive, while aligning their interests with those of shareholders.
It is also seen as a good strategy when it comes to recruiting new talent or retaining valuable employees. Employee share schemes can also compensate for lower salaries and relieve cash-flow pressure. They are also geared towards remunerating employees in a tax-efficient way, while increasing loyalty and reducing staff turnover, and raising working capital.
In the Namibian context, this goes much deeper, because of the historical legacies around apartheid business ownership.
Employee share options, even in the absence of legislation, would thus have been an ideal way to redress this, regardless of whether NEEEF takes flight or not.
“Empowering workers through shareholding will not only create a sense of belonging, but will also act as an incentive for workers to be more productive, as they will now be working for themselves and share in the wealth created by the company through dividend payments,” Geingob said at the time.
It remains unclear whether this clarion call was truly taken heed of, and to what degree plans and actions have been forthcoming with regard to employees owning a piece of the companies they work for. What we do know is that in February 2016, Standard Bank Namibia secured a N$180 million loan from the International Finance Corporation that was used to purchase 10% shareholding in the bank for between 1 400 and 1 500 employees. Other banks have also given employees an option to buy company shares.
In terms of financial institutions, this should be seen in the context of the Bank of Namibia giving foreign-owned banks until the end of 2019 to comply with requirements that locals should hold at least 25%.
Since then, these kinds of employee share scheme initiatives have not hit the headlines.
Globally, employee share schemes are seen as a tool that can motivate employees to become more productive, while aligning their interests with those of shareholders.
It is also seen as a good strategy when it comes to recruiting new talent or retaining valuable employees. Employee share schemes can also compensate for lower salaries and relieve cash-flow pressure. They are also geared towards remunerating employees in a tax-efficient way, while increasing loyalty and reducing staff turnover, and raising working capital.
In the Namibian context, this goes much deeper, because of the historical legacies around apartheid business ownership.
Employee share options, even in the absence of legislation, would thus have been an ideal way to redress this, regardless of whether NEEEF takes flight or not.
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Namibian Sun
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