SNB Capital and Aon team up for employee share plan services

SNB Capital and Aon are teaming up in Saudi Arabia, bringing a joint offering for employee share plan services to listed companies in the Kingdom.

An employee share plans (ESP) is a form of governance that sees employees own part or all of the company they work for. Such plans can be rolled out in different manners, with most plans providing employees with voting rights, dividend benefits from the stock they own, and preferential buy-in agreements (like the ability to buy shares at a discounted rate).

Already quite well established in many parts of the world, this form of ownership is according to Lexology rapidly growing in popularity in Saudi Arabia. Billed as an “uncommon approach” for companies just a few years ago, it has now become a “prime option for many listed employers” in the country.

Running employee share plans requires all kinds of support to be in place, and one of the leading companies in this space is SNB Capital. The Riyadh-based company currently services ten of fourteen listed companies on the Saudi Exchange with a combined total of over 66,000 employees under coverage. SNB Capital supports custody, brokerage, administration, technology, and reporting services, among others.

With the aim to further build out its market position through an enhanced offering, SNB Capital has forged a strategic alliance with Aon, a global professional services firm specialised in human capital, risk, and insurance. The Talent Solutions practice of Aon (which sits in its human capital consulting business) will provide SNB Capital’s teams with counsel and expert support.

“SNB Capital has been at the forefront of employee share plan services in the Kingdom, as the largest and most experienced provider in the landscape. This alliance reflects our commitment to continue driving adoption of these programs,” said Loai Bafaqeeh, Head of Securities at SNB Capital. “We are thrilled to engage with Aon to enhance our services.”

The collaboration will span the entire lifecycle of employee share plans, from design and advisory through to communication, administration and management services.

Alongside focusing on existing listed companies, SNB Capital and Aon will also team up in servicing new clients – listed companies that launch employee equity programs, and companies that enter the listed realm through an initial public offering.

George Broniszewski, Partner at Aon in the Middle East, said: “Aon is in the business of better decisions, and together, we will provide our clients with the expertise necessary to facilitate long-term equity incentive plans that drive success and build more resilient workforces.”

Employee share plans

There are several reasons why employee share plans are gaining attention in Saudi Arabia. A key reason is the ability to build more commitment among staff – ownership plans allows them to benefit from the financial success of the company, contributing to a more motivated workforce.

It also makes financial rewards more long-term oriented, and can be a more cost-effective approach for management teams to hire and retain talent.