Mr Philip Rahaman is no longer employed at First Citizens after having sold his shares at a hefty profit.
Mr Larry Nath may very well now be the officer with the largest shareholding in the bank which he heads as chief executive officer. He too may consider selling his shares at a healthy profit.
To the most fair minded of persons it would be difficult to separate the action of these two bankers. Both men would seem to have employed similar strategic mechanisms to avail themselves of huge portions of the shares reserved for staff in the bank’s IPO.
Some individuals may now have a problem with the CEO’s share acquisition and it may not even end with him.
Houston, we have a problem—how do we fix it? Quite clearly the architects of the IPO failed in their attempt to safeguard the interest of all staff in the allotment exercise. There was no arrangement in place or even pending to permanently maintain the amount of shares allocated to staff from this issue.
The dilution of the share holding of staff was therefore bound to occur. It is not unreasonable to infer from the Minister of Finance’s stated policy position that the staff of the bank should have a continued stake in its shareholding.
The shares allotted to staff were not intended for the almost shameless transfer to other interest groups once the requisite waiting period was over.
Policy whether stated or inferred without an appropriate implementation mechanism to achieve the desired objective could have unexpected consequences.
A better informed parasitic few could always steal a march on the unsuspecting majority. Absent from the staff share allotment equation was any clearly defined mechanism to permanently hold this block of shares for the benefit of present and future staff members.
The board of directors and senior management of any institution which has the interest of its entire staff as a priority would have moved with dispatch to create a unique entity that would safeguard to posterity the entire staff shareholding.
It could then have boasted of another first —the creation of a type of employee participation scheme for present and future employees.
Increased profitability and higher share prices would then be for the benefit of all participating staff.