Airtel Africa Plc has announced that it has awarded shares worth £2.3 million to two of its top directors, Olusegun Ogunsanya and Jaideep Kishore Paul.
The shares were awarded under the company’s Long-Term Incentive Plan (LTIP), which is designed to reward directors for their performance over the long term.
Ogunsanya, who is the company’s CEO, was awarded 1,420,828 shares, while Paul, who is the CFO, was awarded 633,704 shares. The shares are currently valued at £1.1197 per share, giving a total value of £2.3 million.
The shares will vest over five years, subject to the directors meeting certain performance targets. The performance targets include achieving a 40% compound annual growth rate in net revenue, a 40% increase in underlying EBITDA margin, and a 20% ranking on the MSCI Emerging Markets Communications Service Index.
According to a notice to the Nigerian Exchange Limited, the telecom firm said:
- “On 27 June 2023, the Company granted the awards over Ordinary Shares under the terms of the Airtel Africa Long Term Incentive Plan (LTIP) to PDMRs at nil cost”.
The statement signed by Simon O’Hara, Group Company Secretary noted that the number of Award Shares set out is the maximum number which may vest under the Awards, normally following the third anniversary of the award date.
- “The actual number of Award Shares which vest will depend upon the extent to which performance conditions have been satisfied.
- The performance conditions applicable to the 2023 Awards will be based on 40% Compound annual growth in Net Revenue (CAGR %) over three financial years commencing 1 April 2023, a 40% Increase in Underlying EBITDA Margin, and 20% in total shareholder return (TSR) ranking against MSCI Emerging Markets Communications Service Index.
- The 2023 Awards are subject to a holding period which will run until the fifth anniversary of the grant date,” the company said.
What you should know
A long-term incentive plan (LTIP) is a term that is commonly used among listed companies to describe executive share plans under which a company makes share-based awards to senior employees with a vesting period of at least three years.
This Precedent provides template rules for the grant of LTIP awards.
When the shares vest, it will impact the total shareholding of the company and could also lead to a dilution, albeit minimal, of the entire shareholding of the company.
This is really encouraging. It help boost executives performance and give them a sense of belonging in the company.