The Mr. Price equity giveaway.

[Dave A]

From The Sowetan.

Retailer Mr Price yesterday announced that it is giving away R100million worth of company shares to lower paid staff.

The group has established a share trust that will acquire the shares on behalf of staff members earning less than R7000 a month and who have been employed at the company for more than a year. Almost 90 percent of the staff members who are eligible to participate are previously disadvantaged .

“In terms of the scheme, eligible staff members will receive a minimum of 1000 shares – currently worth about R18500 – at no cost and will be entitled to all the dividends and voting rights on those shares,” the company said.

Stewart Cohen, the group’s joint- chairman, said. “The intention is that staff hold these shares until retirement to ensure maximum benefit from their long-term appreciation.”
full story here

The way the deal is structured is very interesting. It avoids many of the dangers associated with BBBEE deals.

Even smarter, it isn't even branded as a BEE deal - and yet enjoys all the positive consequences.

There are lessons to be learnt from this.

[duncan drennan]

One of the interesting things that came out in the article that I read about this was what happened once the shares are given to employees. Once they are actually in employee hands at retirement they become a tradable asset, so what happens in a free market?

And it appears the government will not require companies to re-empower themselves after black people sell their shares, under the maxim "once empowered, always empowered".

The full article can be found here

[Dave A]

And it appears the government will not require companies to re-empower themselves after black people sell their shares, under the maxim "once empowered, always empowered".

Interesting. But I'd be more comfortable seeing that written into an official policy document from DTI before I would rely on that. And even then, I'm not sure we're definitely off the hook.

At the consultation meetings, it became very clear that there is only one real objective - 70% business ownership in black hands. The rest is just stuff to try to make it happen or irritate the heck out of people who won't move on the ownership level.

Now, even if they apply the "once empowered, always empowered" maxim, I consider it unlikely that they're going to measure overall progress that way. (But if they do - GREAT. We could put together a rolling ownership deal that would make JZ proud!)

We've already seen that paying land claimants out in cash has done little to change the land ownership percentage. Condoning bleaching could have much the same result.