According to an analysis of the Saudi Aramco charter it adopted at the start of the year, the company in the upcoming initial public offering could grant shares to its employees.
The analysis show that the recent charter permits the company to issue diverse classes of shares, with the likelihood of preferred stock paying greater dividends but with fewer rights for voting.
The new corporate set-up disclosure at the Kingdom’s top company, and the world’s largest oil exporter, come in a paper authored by Ellen Wald for the Arabia Foundation, a Washington DC based American think-tank.
Ellen Wald and a team set up by the foundation have analyzed and translated the Aramco charter document, which was formerly written in Arabic only. It highlighted what it means for the impending initial public offering.
The analysis of the charter highlights the fact that plans for the initial public offering are moving ahead and that Saudi Aramco probably plans to list shares on foreign exchanges in the near future, as well as on domestic exchanges.
It shows that the future of Aramco stays within the energy and petrochemical sectors, and will not become an arm of the government of Saudi Arabia operating in wider industries.
Furthermore, it summarizes investors’ levels of protection against the influence of the state, but also indicating that the state will have vast influence on the board.
A spokesman of Aramco said that he believed the analysis made by the Arabia Foundation to be based on an accurate translation of the Arabic document. The spokesman added that there was no obligation on the company to publish an English version. He said that it might although be available later.
The implications for about 55,000 existing employees of Aramco, most of who are citizens of Saudi Arabia will be substantial.
Ellen Wald said that offering stocks to Saudi employees of the company could infuse the economy with cash from `widespread’ sources. She said that this would decentralize riches, upsurge commercialism as well as private spending, and also raise the values of real estate, and possibly boost domestic investment in small local businesses.
Wald also believes that this infusion of wealth into the hands of private citizens of Saudi Arabia, together with private and pension plan acquisition of Aramco stock would mean that a huge percentage of the Kingdom would acquire a personal stake in the success and future of the company.
She went on to say that the opportunity for Saudi citizens to own shares in Saudi Aramco would be a substantial impact to the total economic transformation of the Kingdom, which is a key target of the Kingdom’s government.