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Legislation and  Scorecards

ESOPs are being created across the South African economy as a response to the broad based ownership imperatives of national government as reflected in the BBBEE Act, industry-wide sectoral charters and the BBBEE codes and scorecard issued by the DTI. As such, the key imperative driving the establishment of ESOPs by both enterprises and BEE groupings is active compliance with the national transformation agenda as reflected in the regulations.

This situation is unique to the South African environment seeking to re-dress the imbalances created by decades of discrimination under apartheid. Across the world ESOPs have been established as a business imperative to enhance productivity and employee performance, whilst providing additional sources of long term rewards and savings for employees.

The strategic challenge facing national government is to consider how ESOPs can be transformed from passive broad based ownership vehicles, in which employees have little or no knowledge and commitment, to ESOPs that:

1. Entrench BEE imperatives
2. Enhance the competitive capability of enterprises
3. Enhance the national savings imperative
4. Enhance corporate governance and promote social partnerships

Sectoral Transformation Charters