In a strategic move reflecting the company's commitment to human capital, the board of directors of Saudi Telecom Company (STC) recommended to the extraordinary general assembly the approval of the company's purchase of a number of its own shares for allocation to its employee stock incentive program. This decision further strengthens the company's position as one of the most attractive work environments in the Kingdom and the region.
Recommendation details and purchase mechanism
According to an official statement published on the Saudi Stock Exchange (Tadawul) website on Wednesday, the Board of Directors recommended the purchase of 26 million ordinary shares. The company plans to hold these shares as treasury shares, to be allocated later within the employee incentive program. The company confirmed that the purchase will be fully financed through its own resources, reflecting STC's strong financial position and its ability to meet its obligations and support its expansion and incentive plans without resorting to borrowing.
Procedures and voting
The company clarified that this recommendation will be subject to a vote by the company's shareholders during the upcoming Extraordinary General Assembly meeting, the date and details of which will be announced later. This is in compliance with the requirements of Paragraph (4) of Article (17) of the Implementing Regulations of the Companies Law pertaining to listed joint-stock companies. The company also noted the necessity of fulfilling the solvency requirements stipulated in Paragraph (3) of the same article, in addition to submitting a report issued by the company's auditor confirming compliance with these requirements. It is worth mentioning that, as per regulations, the shares to be purchased (treasury shares) will not have voting rights at the company's general assemblies of shareholders.
The importance of employee incentive programs in large companies
Employee stock-based incentive programs are effective financial and administrative tools used by leading global companies to enhance employee loyalty and align their interests with those of shareholders. By owning shares in the company, employees have a greater incentive to contribute to its long-term growth and profitability, which positively impacts the stock's performance in the financial market.
STC is a leader in the telecommunications and information technology sector in the Middle East and North Africa region, and plays a pivotal role in enabling the digital transformation in the Kingdom of Saudi Arabia in line with Vision 2030. Therefore, retaining national talent and attracting global talent is a key pillar for the continuation of this growth and innovation.
STC's financial strength
The company's ability to finance the purchase of 26 million shares from its own resources sends positive signals to investors about the strength of its cash flow and financial stability. Share buybacks, whether for cancellation or incentive purposes, are typically seen as a sign of the board's confidence in the company's future and operational performance. STC continues to deliver strong financial results, supported by its expansion in the fintech, cybersecurity, and cloud computing sectors, making investment in its human capital an investment in its most valuable asset to ensure the sustainability of these successes.
