Half-price share bonanza for Nampak execs

Nampak has announced that its CEO and CFO will acquire additional shares in the company through an incentive scheme, which could see the executives get shares for half the price.

In its latest SENS announcement, Nampak unveiled an equity participation incentive scheme targeting its top executives, CEO Phil Roux and CFO Glenn Fullerton.

Roux and Fullerton were each given the right to participate in this scheme by personally investing up to R4,000,000 and R3,999,975, respectively, of their own funds to acquire shares in Nampak. 

After making this personal investment, Roux and Fullerton will be given the right to acquire more shares in Nampak, equal to four times or two and a half times, respectively, the amount of their initial personal investment, at the price of R175 per share.

This price is at a 50% discount to the weighted average traded price of the company’s ordinary shares over the 30 business days prior to 14 August 2024, the date the price was agreed upon.

In addition, Nampak will loan the directors the funds needed to acquire these further shares on an interest-free basis. 

On 7 December 2023 and 16 February 2024, Roux and Fullerton completed the purchase of Nampak shares in terms of their personal investment.

“Accordingly, each of the Director Subscribers is entitled, in terms of their respective contracts of employment, to acquire additional Nampak shares at the Specific Issue Price,” the company announced today.

Roux is entitled to an additional 91,429 Nampak shares, and Fullerton is entitled to an additional 57,143 shares.

These specific issue shares are treasury shares, i.e., Nampak shares held by a subsidiary of the company.

Nampak explained that this incentive scheme is strategically designed to align the financial interests of the executives with those of the broader shareholder base. 

Therefore, by granting them the opportunity to acquire shares at a discount, Nampak aims to foster a greater sense of ownership and commitment among its leadership.

Notably, given the significantly discounted share price and the executives’ status as related parties, the transaction necessitates shareholder approval through a special resolution. 

This is in line with both the Companies Act and the JSE Listings Requirements.

Therefore, the issue is subject to the JSE’s approval of the transaction and listing of the shares, and the approval of Nampak shareholders.

Under the Companies Act, an issue of shares to a related or inter-related party must be approved by a special resolution of a company’s shareholders and requires at least a 75% majority of the votes cast in favour of the resolution.

In terms of the JSE Listings Requirements, the issue requires approval by way of an ordinary resolution – requiring at least a 75% majority of the votes cast in favour of the resolution – by all Nampak shareholders present or represented by proxy at a general meeting.