A step-by-step guide for Nigerian listed companies on setting up an employee share scheme — from board approval to CSCS registration and ongoing administration.
Setting up an employee share scheme for a Nigerian listed company involves a clearly defined process — from the initial board decision through legal documentation, regulatory notification, allotment processing, and CSCS registration. Each step must be completed correctly to ensure the scheme is legally sound and the shares are properly registered in employees' names.
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The first step is a board resolution authorising the scheme. The proposal should cover: the purpose of the scheme, who is eligible, how many shares will be allotted, the vesting or holding period, the leaver policy, and the total cost to the company. The board must pass a resolution before any shares can be allotted.
The scheme rules are the legal foundation of the arrangement. They define: eligibility criteria (seniority, length of service, performance level); the allotment formula or individual grants; the vesting period and conditions; what happens to vested shares when an employee leaves; and any performance conditions. Your company secretary and legal advisers should draft these.
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Depending on the size of the allotment relative to the company's issued share capital, CAMA 2020 and your company's articles may require a shareholder resolution approving the scheme. This is typically passed at the Annual General Meeting or through a special general meeting. Take legal advice on whether your scheme requires shareholder approval.
Listed companies must notify the Securities and Exchange Commission (SEC) Nigeria of the employee share scheme under current SEC rules. The company secretary manages this notification. Shares Saver provides supporting documentation as part of the administration process.
Once the scheme is approved and regulatory steps are complete, the company submits allotment instructions to Shares Saver. We process the allocation of shares to each eligible employee, ensure each employee has a verified Shares Saver account, and coordinate the full CSCS registration process.
Each employee's shares are registered in their own name through the CSCS — creating a direct, individual ownership record. Shares Saver provides a full allotment register confirming each registration. Employees access their Shares Saver account to view their shareholding, valuation, and ownership documents.
The ongoing administration of an employee share scheme — managing dividends, handling leavers, providing compliance reporting — requires a reliable administration partner. Shares Saver provides end-to-end administration for NSE-listed companies, ensuring each employee remains a directly registered shareholder throughout their employment and beyond.
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