By Engineer Jacob Kudzayi Mutisi
According to adverts placed with the media on the 24th May 2019, TSL Limited Annual General Meeting (AGM) one of the resolution is to be approved is, “TSL 2018 Executive Share Appreciation Rights Plan”.
As I previously raised and I will raise this issue again we need the participation of all stakeholders to benefit from share options not just the executives.
In the previous press release it was 10% which were 35,710,244 shares and now its 5% which are 17,855,122 shares but the difference is the same let us get all shareholders and stakeholders involved.
What is an “Executive” Share Appreciation Right Plan? In the press release TSL endeavours to justify this, but closer scrutiny reveals it is an opportunity for majority shareholders, company directors and executives to have significant shareholding, or majority shareholding, indirectly, in TSL at the expense of minority shareholding and non-executive employees.
Why cant TSL go for Employee Stock Option (ESO), by allowing all employees the right to also buy a certain amount of company shares at a predetermined price for a specific period? Why only the executives in this case?
As a former investment banker and investment analyst as I analyse this whole exercise, it is qualitative and fraught with subjectivity. No one has said what quantitative benefit will accrue to the stakeholders other than the beneficiaries of the share option scheme who stand to gain 5% from TSL stock. No one seems to definitively declare that by giving away 5% of the company the share price will increase by what percent and what will happen to the net revenues over 5 years and what dividends will be guaranteed to the existing shareholders especially minority shareholder..
Over the years company executives who are supposed to safeguard our Zimbabwean companies are becoming dangerous to the existence of the same companies, especially where weak board oversight is prevalent.
TSL Limited is a big company whose Directors and management are well remunerated and well-resourced who can easily buy shares through the Zimbabwe Stock Exchange like any other individual. We in Zimbabwe, now have a corporate culture where management/executives have devised a way to acquire majority or indirect control shareholding, through either share options or through these fancy phrases like Executive Share Appreciation Right Plan.
The time has come to protect the workers who work hard to keep the company operating and the minority shareholders who are always the losers at the end. It is time for the minority shareholders to ask some difficult questions.