Global ESOP – In It Together
The tech industry is often associated with innovation and disruption, yet it is also a sector that relies heavily on the hard work and dedication of its employees. Startups in particular are known for their fast-paced and demanding work environments, where employees are expected to work long hours and wear many hats. While this can be exhilarating and rewarding, it takes intentionality to create a sustainable and equitable work environment.
One way that startups have traditionally incentivized and rewarded their employees has been through Employee Stock Ownership Plans (ESOPs). However, ESOPs have historically been exclusive to senior executives and key hires. This approach has created a sense of inequality and misaligned interests.
As we celebrate Labor Day, and in recognition of the dedication and commitment of our staff, we have rolled out an Employee Stock Ownership Plan (ESOP) to all full time employees at MarketForce. This is the culmination of a long-standing dream for us, and we are grateful for having a supportive Board, and investors who value our commitment to our staff.
When we started our business, we resolved to anchor our brand on timeless values. Values that will not only differentiate us as a brand, but will enable MarketForce to be a place where our staff will be delighted to work; a place where we embrace a culture of ownership; and a place where together, we transcend all odds. It is therefore with great pride and joy that we roll out of this Global ESOP program, and invite the entire MarketForce family to be part of the mission, not just as employees, but as owners. Some of the exciting benefits we foresee from putting in place an inclusive ESOP program include:
Attract and retain talent
Extending ESOPs to employees has proven to be an effective way to attract and retain top talent. Employees who are offered the opportunity to own a stake in the company feel more invested in its success and are more likely to remain with the business long-term. Additionally, by offering ESOPs to all employees, we are sending a message that the company values its workforce and recognizes the contributions of all team members.
Improve employee engagement and performance
ESOPs have also been shown to have a positive impact on employee engagement and performance. When employees have a stake in the company’s success, they are more likely to go above and beyond in their roles and take a more active interest in the business. We expect to see increased productivity, improved morale, and better overall performance.
Promote a culture of ownership
One of the most significant benefits of ESOPs is that they promote a culture of ownership within the organization. When all employees are given the opportunity to own a stake in the company, they feel a greater sense of responsibility for its success. This should lead to more innovation, better decision-making, and a more engaged and committed workforce.
Drive Diversity, Equity and Inclusion
By offering ESOPs to all employees, companies can create a more diverse and inclusive workplace culture. ESOPs are also a powerful tool for promoting economic equity, as they offer employees the opportunity to own a stake in the company and benefit from its success. By extending ESOPs to employees from all backgrounds and levels of the organization, we hope to create a more equitable workplace where everyone has the opportunity to share in the benefits of the company’s growth and success.
Improve Corporate Governance
By extending ESOPs to all employees, companies can create a more democratic workplace culture where all employees have a say in the company’s decision-making processes. This will lead to improved corporate governance and a more agile and responsive approach to business management.
Provide tax benefits for the company and employees
Finally, ESOPs can provide tax benefits for both the company and its employees. For the company, contributions to an ESOP are tax-deductible, and the company can use ESOP financing to fund its growth. For employees, ESOPs can provide a tax-efficient way to save for retirement, as gains from ESOP stock are taxed at capital gains rates rather than income tax rates in many countries.
Implementing an inclusive ESOP program does require careful planning and a commitment to transparency and communication. We would therefore like to thank Muthoni Wachira for developing the Global ESOP strategy and obtaining governance approvals; Njoki Karungu-Karuga for effectively communicating the benefits and risks associated with share options to all employees; and to Peter Nakitare for onboarding all of us onto a digital equity management platform that facilitates legal compliance and access to information.
As we celebrate Labour Day this year, let’s remember the important role that employees at all levels play in our society and in the success of our organizations. Let us commit to finding new and innovative ways to support and empower our employees. And if you are a startup founder or leader, consider extending your ESOP to all employees and reaping the benefits of a more inclusive workplace culture; improved workforce engagement, commitment and productivity; and better overall performance and governance.
Garrison Wynn put it well when he said: “Before you can have great employees, you have to put them in a position to create their own future. “
So as we continue to reimagine a better future for neighborhood merchants across Africa and the communities they serve, what finer way to do so, than with people that we can call comrades. Afterall, we are in it together, a bunch of underdogs trying to defy gravity.
Author: Tesh Mbaabu & Mesongo Sibuti