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Saudi British Bank’s employees get lucky as share buyback is approved to fund their incentive programMENA

Saudi British Bank’s employees get lucky as share buyback is approved to fund their incentive program

Daft Punk may have parted ways, but SABB’s employees still managed to ‘get lucky’ this week.

The Saudi British Bank’s board just approved a proposal to buy back four million of its own shares so the bank can fund its employee stock long- term incentive program.

A long-term incentive plan (also known as LTIP) is meant to reward employees in a way that is not necessarily tied to the company’s share price. Instead, it links an employee’s compensation with the company’s long-term success and, therefore, fosters a high-performance environment and staff loyalty in the long run.

FYI, SABB is also nearing the completion of its merger with Alawwal Bank, which is expected to be completed by the end of Q1 2021.

why it matters
SABB recently reported a loss of over $1b in 2020, mainly due to a huge goodwill impairment. Its decision to approve the share buyback shows that it is confident in its financial stability in the long-term, despite the pandemic’s impacts.