In a strategic move aimed at enhancing the work environment and motivating employees, Alinma Bank's a significant recommendation to the Extraordinary General Assembly, approving the purchase of up to 5 million bank shares. This decision is intended to allocate these shares to the bank's long-term employee incentive program and hold them as treasury shares.
Purchase and financing details
In its official statement published on the Saudi Stock Exchange (Tadawul) website, the bank clarified that the share purchase will be financed entirely from its own resources, reflecting its strong financial position and its ability to meet its obligations and development plans. The statement also indicated that the bank currently holds treasury shares representing 0.51% of the total shares of the class being acquired.
Regulatory approvals and legal procedures
Alinma Bank confirmed that it has received approval from the Saudi Central Bank (SAMA) to complete the purchase of 5 million shares and allocate them to the program, dated 11 Rajab 1447 AH, corresponding to December 31, 2025. This process is subject to several strict regulatory controls, and the decision will be voted on at the upcoming Extraordinary General Assembly meeting, the date of which will be announced later.
This step comes in compliance with the requirements of paragraph four of Article Seventeen of the Implementing Regulations of the Companies Law pertaining to listed joint-stock companies. The bank also emphasized the necessity of fulfilling all the solvency requirements stipulated in paragraph three of the same article, along with submitting a report certified by the bank's auditor confirming this.
The importance of employee incentive programs in the banking sector
Long-term employee incentive programs (LTIPs) are effective financial and administrative tools adopted by major financial institutions globally and locally. These programs aim to:
- Attracting and retaining talent: In light of the high competitiveness in the Saudi banking sector, these incentives help to retain outstanding leaders and talents.
- Enhancing corporate loyalty: By giving employees a share in the bank’s ownership, their interests are linked to those of the shareholders, motivating them to work harder to increase the share value.
- Sustainability in performance: These programs encourage long-term strategic thinking rather than focusing solely on short-term quarterly results.
Economic context and financial market development
This announcement aligns with the significant developments in the Saudi Arabian financial sector under Vision 2030, where listed companies strive to adopt best practices in corporate governance. The decision to purchase using internal resources reflects the bank's management's confidence in future cash flows and the strength of its balance sheet.
It is worth noting, as is the practice in financial systems, the purchased shares (treasury shares) will not have the right to vote in the general assemblies of the bank’s shareholders, thus ensuring the neutrality of administrative decisions.
