FMDQ CEO Bola Onadele. Koko received stock options during the 2020 financial year that are now worth N4.66 billion, according to a company filing seen by MoneyCentral.
The FMDQ Group granted 486,683,000 share appreciation rights (SARs) to Onadele Koko, the Group Managing Director/Chief Executive Officer (GMD/CEO) that entitles him to a cash payment.
Under the compensation arrangement, Onadele Koko is eligible for options to buy up to 486,683,000 shares of stock at an exercise price of N1 each.
A stock option is the right to buy a specific number of shares of company stock at a pre-set price, known as the “exercise” or “strike price.
FMDQ shares are not listed but the firm calculated the share price of the SARs as N9.58 per share valuing the total share options package at N4.66 billion at the end of 2020, according to MoneyCentral’s calculations.
The fair value was determined using the binomial model adjusted for exit rate and vesting period, FMDQ said in the filing.
The amount of the cash payment is determined based on the increase in the share price of the Holding Company between grant date and the time of exercise, equivalent to 6.4 years of service and Key Performance Indicators (KPIs) as indicated in the CEOs employment contract.
The KPIs or operating targets to be met by Onadele. Koko before the options can be exercised were not disclosed in the filings.
FMDQ a financial markets infrastructure group reported revenue that rose by 44.45 per cent to N31 billion in 2020, from N21.46 billion in 2019, while after-tax profit hit N11.239 billion in 2020 up 9.79 percent.
The FMDQ share price at the end of 2020 (N9.58 per share) implies a market capitalization of N93.21 billion for the firm.
The options outstanding at 31 December 2020 had an exercise price of N1.00 following the issue of bonus share during the year. The weighted-average contractual life of the option is 6.4 years.
The total stock options owned by the CEO Onadele Koko in 2020 were equivalent to 5% of the company’s stock.
FMDQ carried liabilities of N2.509 billion as at December 2020 arising from the SARs issued to its CEO.
Guaranty Trust Bank PLC, UBA PLC, Zenith Bank PLC, Stanbic Bank PLC, Access Bank PLC, the Central Bank of Nigeria (CBN) and Nigerian Stock Exchange (NSE) are also shareholders of FMDQ.