Massmart delivers to staff
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In a statement issued today, mass merchandise retailer, Massmart delivered the first dividend payment to permanent staff participating in the Staff Empowerment Transaction announced by the Group in May 2006. This transaction involved placing 18 million shares representing approximately 9% of Massmart’s equity in trust for the benefit of Massmart’s permanent staff.
The trust known as the Thuthukani Staff Empowerment Trust has enabled 15 077 permanent employees to become Massmart shareholders and confers on them all shareholder rights, including voting rights, the right to earn dividends and to earn a capital profit by selling their shares in the future. Shares were issued to permanent staff based on their length of service with the Group. In other words staff with the most years’ service received the highest amount of shares.
Massmart’s deputy chairman and CEO, Mark Lamberti, says that the first dividend payment of R8.8-million was paid into the Thuthukani Empowerment Trust on 19 March 2007 and will be distributed to participating Massmart staff with their April salary payments. “This represents a dividend per share of 49.25 cents or 25% of the declared dividend of R1.97,” he adds.
In terms of the Empowerment Trust Agreement, beneficiaries earn 25% of the full Massmart dividend during the first year of the transaction, 50% in the second year, 75% in year three and 100% of the dividend for each year thereafter.
“The value of the empowerment deal was in excess of R 1-billion based on the market price of R56.75 per share on 01 October 2006 when the transaction came into effect. Shares were, however, awarded to staff at a strike price of R49.98 each which equated to a discount of 12% per share. The share is currently trading at around R78.05 which represents significant growth in value for our staff,” says Lamberti.
Driver at Massmart Holdings, Kaiser Dikgale, who has been with the company for 20 years and who will receive a dividend of R1019-48 says: “This is very nice. It is good because it recognizes my work at Massmart. I’m going to put the money towards painting the new extensions to my house.”