Investcorp Bank's ownership and subsidiary structure is designed to ensure that:
- the interests of Investcorp Bank's strategic shareholder group, comprised of Investcorp Bank directors, prominent Gulf individuals and institutional shareholders, together with public shareholders, are closely aligned with those of management; and
- Investcorp Bank effectively operates as a management controlled entity.
Substantially all of the Investcorp Group's assets and operations are owned and controlled by ISA. As a result, substantially all of the Investcorp Group's commercial risks are held outside of the Middle East.
The shareholding structure of Investcorp Bank is outlined in Note 1(A) (iii) to the consolidated financial statements of Investcorp Bank. At June 30, 2014, Investcorp Bank is owned by public shareholders, management and strategic shareholders. Public shareholders own approximately 22.8% of the Ordinary Shares of Investcorp Bank which are traded on the Bahrain Bourse and are held predominantly by Gulf-based nationals and institutions and International shareholders hold 0.3% of the Ordinary Shares, represented by unlisted Global Depositary Receipts. SIPCO Limited ('SIPCO') directly and indirectly owns 30.4% of Investcorp Bank's ordinary shares. Investcorp Funding Limited ('IFL'), a subsidiary of Investcorp Bank, holds 7.8% of Investcorp Bank's Ordinary Shares.
The 38.2% of Investcorp Bank's ordinary shares owned directly and indirectly by SIPCO and IFL represents:
- management and other current and former Investcorp Group employees' (approximately 95 current and former employees in the aggregate) ownership of beneficial interests in 16.6% of Investcorp Bank's Ordinary Shares through Investcorp Employee Share Ownership Plans (each such plan an 'ISOP');
- treasury shares, amounting to 9.4% in shares that are held for potential grant to an ISOP and 4.4% acquired but unvested shares under an ISOP; and
- treasury shares, amounting to 7.8% of Investcorp Bank's Ordinary Shares, available for future sale to strategic shareholders or for management to acquire beneficial interests in Investcorp Bank's Ordinary Shares through an ISOP.
The ownership of beneficial interests in Investcorp Bank by management and other employees is implemented through the ISOPs. The ISOPs provide for management and other employees to buy their allocated beneficial interests in Investcorp Bank utilizing incentive compensation. These plans are intended to promote stakeholder alignment, encouraging management to focus on long term value creation and prudent control of balance sheet risks. Investcorp Bank has approval from the CBB to hold up to 40% of Investcorp Bank's Ordinary Shares for the ISOPs.
Ownership Holdings Limited (‘OHL'), a Cayman Islands company, has control of 65.6% of Investcorp Bank's ordinary shares directly and through C.P. Holdings Limited (‘CPHL'), a Cayman Islands company. CPHL is majority owned by OHL which, in turn, is majority owned by SIPCO. Strategic shareholders own the balance of CPHL and OHL. SIPCO also holds 3.6% of Investcorp Bank's Ordinary Shares directly.
As a result of certain proxy arrangements and Investcorp Bank's ownership structure, a group of six Investcorp Bank Directors and senior executive officers controls the voting of 69.1%1 of the Ordinary Shares of Investcorp Bank.
Investcorp's senior management (Investcorp's Managing Directors) hold beneficial interests in Investcorp Bank's Ordinary Shares through the ISOPs. Except for Nemir A. Kirdar, the Executive Chairman and Chief Executive Officer of Investcorp Bank, who holds 107 Ordinary Shares of Investcorp Bank in his capacity as a Director of Investcorp Bank, no member of senior management of Investcorp directly holds Investcorp Ordinary Shares. Certain members of senior management hold Investcorp Bank Preference Shares.
Information regarding the ownership and trading of Investcorp Bank's Ordinary Shares and Preference Shares by Investcorp Bank's Directors and the ownership of Investcorp Bank Preference Shares by certain members of senior management is provided in the Investcorp Bank Fiscal Year 2014 Corporate Governance Report (‘Fiscal Year 2014 Corporate Governance Report') which is a supplement to this Annual Report. The Fiscal Year 2014 Corporate Governance Report also is available on Investcorp's website (www.investcorp.com).
Click here to download a copy of the report.
As reported above, an aggregate of 76.9%1 of Investcorp Bank's Ordinary Shares are held by SIPCO, OHL, CPHL and IFL, each of which is a Cayman Islands company.
1 Numbers may not add up due to rounding