JMMB rewards staff with shares
Jamaica Money Market Brokers Limited (JMMB) last year opted not to increase salaries in a period of restructuring and cost contain-ment, but weeks to the close of its financial year has decided to reward workers with a distribution of 23 million units of company stock.
"The company has arranged for the Employee Share Ownership Plan (ESOP) to purchase a block of shares for future distribution to the current team at the current low price, which is below book value," said JMMB in a statement.
The company's financial year closes March 31.
The purchase of the 23,495,869 shares was recorded by the stock exchange on March 9. The units were put up by directors and other members of the firm who had indicated a willingness to sell.
The transaction, at $4 per unit, was valued at $94 million.
The company said net savings from not granting a 15 per cent increase in salary for fiscal 2009 will result in net benefit of $99.98 for one year.
"Our team members who have generated company growth will benefit from their efforts in the future when the markets recover," JMMB said.
Its stock in the past year has traded as high as $6.
The money market firm said it would return to paying cash increases in 2010, but did not disclose the proportion.
JMMB's fourth quarter is three weeks to closure, but its nine-month results at December 2009 reflect a 63 per cent drop in net profits to $649 million. However, for the reporting period the company managed to keep its operating expenses down, moving to $1.6 billion, from $1.8 billion, for the nine-month period in 2008.
While the nine-month results did not break out staff cost, of its total operating cost, which amounted to $2.5 billion at the end of its fiscal year, their remuneration accounted for 51.34 per cent of expenditure.
JMMB said the amount of shares sold by directors participating in the share reward plan amounted to approximately four per cent of their holdings.
The ESOP already controls approximately 10.7 per cent of the 1.46 billion JMMB ordinary shares outstanding with a market value of $5.9 billion. The current transac-tion adds another 1.6 per cent, bringing holdings to "180,407,700, or 12.33 per cent of total shares," said Janet Patrick, chairperson of the ESOP Trustees.
The shares will become available to all employees from April 1, in line with the rules of the ESOP Act.
"JMMB team members will be allotted shares equivalent to 10 per cent of their emoluments in Year One and five per cent of their emoluments in Year Two. No shares will be allotted to team members who already have more than a five per cent holding in JMMB," Patrick said.