Diversified trading firm Car and General (C&G) is set to scrap its dormant employee share ownership plan (Esop) as it considers an alternative remuneration scheme to motivate its staff.
The Nairobi Securities Exchange-listed firm formalised the share ownership plan in 2014 but has not implemented it, with the company now set to terminate it at its annual general meeting on June 23, 2026.
“We are terminating the Esop for two reasons: it has never been implemented and we also believe we have better alternative incentive schemes for our employees,” said Vijay Gidoomal, the chief executive at C&G.
Mr Gidoomal added that the company is yet to determine the specifics of an alternative remuneration scheme, noting that there are diverse benefits options that can be packaged and offered to staff.
The company’s employees are currently paid exclusively in cash as salaries and retirement benefits. C&G incurred total staff costs of Sh1.5 billion in the year ended December 2025, up from Sh1.42 billion the year before.
The higher payroll costs were driven partly by a growth in the workforce to 1,280 from 1,189.
C&G has diversified operations including trade, poultry, manufacturing and real estate, indicating that it would have had a more difficult task in designing its Esop performance and allocation rules compared to a less complex business.
Share-based compensation schemes are seen as aligning the interest of workers with those of shareholders. By owning stock in their company, employees are exposed to the upside and downside of their performance and decisions.
Most NSE-listed firms, however, pay their employees including senior managers in cash (salaries and bonuses), simplifying their payrolls and protecting their shareholders from potential dilution.
A few others give shares to their top executives for free or at a minimal cost on top of their salaries and bonuses. Safaricom and Equity Group are among the other firms with stock-based compensation plans.
Equity’s shareholders in 2024 voted to issue 198.6 million shares to its Esop where employees will be able to buy stocks at discounted price of 50 cents apiece.
NCBA Group, which has not implemented its Esop for more than seven years, says it will soon start allocating shares to qualifying employees.
Kenya Airways had also not issued shares to qualifying staff for more than seven years under its Esop by the end of 2024.
Esops are usually designed to attract and retain employees, with the workers usually able to access the shares after several years on a rolling basis.
Most of the shares tend to be taken up by top executives who are seen as the most critical talent in driving strategy and culture, especially in competitive sectors such as finance.
