Momentum Metropolitan empowers 13,000 employees with 44.9-million shares
Momentum Metropolitan delivers on empowerment promise for all permanent, SA-based employees
On April 22, Momentum Metropolitan Holdings delivered on its proposed employee ownership share plan (Esop), empowering more than 13,000 employees from an allocation of about 44.9-million shares. This follows the shareholder approval as announced in November 2020.
The inclusive employee share ownership plan benefits all permanent, SA-based employees and though weighted in favour of black employees, including African, Coloured and Indian as defined in the broad-based black economic empowerment (BBBEE) codes, it includes all race groups.
Black employees, who constitute more 78% of the group’s employee base, will receive at least 85% of the economic benefits from the scheme. Black women employees will receive 55% of the economic benefits from the scheme. Current employees will receive 80% of the share allocation, with the remaining 20% being set aside for new employees joining the group over the next five years.
The transaction further enhances the company’s BBBEE objectives through more representative ownership, and aligns with its growth strategy. The pursuit of economic transformation is an important business imperative for enabling sustainable new business opportunities and growth. This inclusive transaction will therefore contribute to value creation for all the group’s stakeholders including shareholders, clients, financial advisers and employees.
Jeanette Marais, deputy CEO of Momentum Metropolitan, says, “As a company committed to authentic economic transformation, this is a significant milestone in providing inclusive equity ownership for our employees, who become shareholders and co-owners of the company. The transaction has a 10-year restricted period before employees can receive shares, and is thus focused on long-term value. It is a way for employees to collectively work towards and share in the success and growth of the company over time. For many, this will be the first acquisition in their personal share portfolios.
“Named iSabelo, which means gift granted, the transaction will strengthen the group’s BBBEE equity ownership pillar and contribute towards retaining its competitive empowerment rating, which is important for doing business in SA. We are proud that the Momentum Metropolitan Group has retained its level 1 BBBEE status for three consecutive years.”
Employees are not required to contribute financially towards their allocation of shares; however, they will need to remain employed for seven years to retain 100% of the benefit of their allocated equity, subject to a 10-year redemption restriction. Employees resigning early will retain a percentage of their allocation, again subject to the 10-year redemption restriction. Retiring or deceased employees will retain 100% of their allocation.
To underscore the spirit of inclusivity, employees were invited to become the faces and ambassadors of the launch campaign. Professionally styled and photographed, employees were primed as models and ambassadors for the day.
Unanimous in their enthusiasm and endorsement of the Esop, reactions included:
“iSabelo makes me feel valued and excited at the same time.” (Hemisha Kara, Metropolitan);
“iSabelo makes me feel powerful and I have a say.” (Michael Whitehead, Momentum provincial executive); and
“iSabelo makes me feel ecstatic and included.” (Juaneez Madumbo, Momentum Metropolitan IT human capital).
Employees also gave input on the design of the iSabelo visual identity, logo and look and feel.
After the requisite approval received from shareholders in November 2020, 3% of the issued ordinary share capital of Momentum Metropolitan Holdings, of about 44.9-million shares, has been placed in the Momentum Metropolitan iSabelo Trust, for allocation to current and future permanent SA-based employees over five years.
Lulama Booi, head of balance sheet management and iSabelo project lead, says: “The trust has been set up to enable effective governance through an independent board of trustees. Employees will have the opportunity to appoint the majority of the trustees, of which two will be employees. Through these governance structures, employees will be able to influence how the trust votes on MMH [Momentum Metropolitan Holdings] shareholder resolutions. We look forward to welcoming this new group of active shareholders.”
Outlining the funding of the transaction, Marais says: “The group has contributed 10% towards the initial cost of the shares, with the remaining 90% funded with debt, which the group also partly funded, and which will be serviced and repaid through dividends and share price growth. Staff therefore benefit from the 10% discount, and the extent to which the total shareholder return exceeds the cost of the debt.”
Says Marais: “With owning a part of the business also comes the responsibility of doing what is right for the business and for our stakeholders. We hope that being a shareholder will encourage our employees to think like entrepreneurs and employ a strategic mindset in how they would grow and thrive their business. The success we achieve together, will be shared.”
This article was paid for by Momentum Metropolitan.
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.