Coca-Cola Beverages South Africa (CCBSA) has launched its landmark Ikageng Employee Share Trust that will offer its employees shares and direct economic participation in the business.
Ikageng will benefit nearly 8000 South African based employees currently employed at CCBSA, Coca-Cola Beverages Africa (CCBA) and Appletiser. Every employee will receive an equal allocation of shares through the established Ikageng Trust regardless of staff level, race or years of service.
“We remain committed to the ideal of transformation and B-BBEE, and this investment is driven by the recognition that employees are our biggest asset, as they enable innovation, growth and the sustainable development of our company” said Velaphi Ratshefola, Managing Director of CCBSA. “As part of our mission to create shared opportunity and value throughout our business, we want employees to have a vested interest in delivering an enhanced value while influencing and directly participating in the company’s long-term vision of sustained profitability.”
Ikageng means ‘let us build ourselves’, a seTswana name chosen by one of the employees. It is a name that was generated internally through a staff campaign, which reaffirms that employees own more than just a share, but the spirit and identity of the company they work for.
“Since inception in May 2016, CCBSA took a bold step to contribute meaningfully to the country’s ideal to be an inclusive and transformed organisation. We committed ourselves to becoming a level 2 contributor by 2021 and set off on our journey to achieve this,” Ratshefola continues.
The Ikageng Trust holds a shareholding in Coca-Cola Fortune (Pty) Ltd (CCF), which in turn owns 100% of CCBSA. The equity ownership is substantially higher than the 3% required by the B-BBEE Codes.
The trust is fully funded through Notional Vendor Funding (NVF), with a portion of the dividends reducing the NVF and a portion paid to beneficiaries. This allows for the NVF amount to be settled and the transfer of a higher net value to beneficiaries in the long-term, while allowing beneficiaries to also receive benefits from the outset.
Ikageng beneficiaries receive dividends from day one. Employees will never be required to outlay any cash of their own at any time. In this way, CCBSA can provide its employees access to equity participation that encourages a mutual objective of ensuring the long-term success for both the company and its employees.
The drafting of the Trust documents, which govern the activities of the Trust, was a consultative process, involving unions, the company and regulators. The board of eight trustees is made up of four beneficiary-appointed trustees, three company-appointed trustees and an independent trustee. As such, the Trust has been formed with robust mechanisms to ensure that beneficiary interests are put above all other considerations.
“Our transformation strategy includes bold initiatives in supplier inclusion and transformation and increasing our black ownership level” Ratshefola added. “It is in this spirit that we have established The Ikageng Employee Share Trust to extend the ownership opportunity to our employees. We have always maintained that we see the merger conditions set out by the Competition Authorities as an opportunity to impact our society meaningfully and we have always embraced and aimed at not only meeting them but exceeding them. I am humbled and proud of what we have been able to achieve on our transformation journey so far, and Ikageng is certainly the highlight for us.”
