Good morning, Wazua,

I was intrigued by the topic of CEO ownership at the NSE, which Coldtusker wrote about last month.

So, I put together a list of five CEOs who had large ownership stakes in their businesses at the end of 2008 in order to see if these stocks outperformed the NSE as a whole.

You may be intrigued by the results. :)

5 Kenyan CEOs Who Bet Big On Their Own Stock

Did I miss anyone? Coldtusker mentioned Pradeep Paunrana at ARM, but I wasn't able to find an ownership amount for him as of December 2008.

Cheers,
Ryan

Good one @hooverl, reminded me of when we discussed
Does ownership matter, in listed companies?

To rehash the following factors significantly contribute to firm performance
1. Foreign ownership
2. Diffuse ownership
3. Corporation ownership
4. Manager ownership

Thanks, everyone, for your responses here, on the blog, and via Twitter.

I've update the article to include ARM's Pradeep Paunrana.

6 Kenyan CEOs Who Bet Big On Their Own Stock

As AGuyTrying predicted, ARM's inclusion further bolstered the CEO-owned firms' performance. Their average return since the end of 2008 is more than double that of the market index.

Very good to see Britak, CIC, BBK, KenolKobil, and KCB CEOs following the same example.

Any bets whether these five stocks will outperform the market over the next four years?

There was a recent article which mentioned Pradeep Paunrana of ARM had 18% of ARM. I think it was carved out of the family's ownership.

James Mwangi was forced by CBK to sell down his ownership interest in Equity Bank to 5%. He had a much larger stake. Those sales have minted him a lot of moolah as well. When those gains are included, the return is even better for him. Other directors have had large stakes. The former CEO was John Mwangi. The Corporate Strategy Director Mary Wamae as well as the former Chairman Peter Munga.

@VituVingiSana Glad to know Mwangi was forced to reduce his Equity stake. I saw that his shareholding declined since 2008 and was puzzled as to why he sold.

Very interesting. Mwangi, Somen, Muriuki, and Thakrar all own a smaller percentage of their respective companies now than they did at the end of 2008.

Cuthbert actually purchased more shares of REA Vipingo this past fiscal year. (Somen purchased more of Access, too.) So, he now owns over 3% of his company. So the sisal-maker may be worth a closer look.

Its the Central Bank Regulations. An individual should not own more than 25% of a bank while a manager should not own more than 5% of a bank.

Mwangi will have to keep selling because he gets share options from Equity.

Truth be told. There has been profit taking by anchor shareholders in Equity Bank since the 2 year lock-in period ended. Even Britak is selling. Check 2011 Annual Report