Transcript Communicating Employee Share Plans

Communicating Employee Share Plans
Workshop – EOG Conference
Charlie Viola, Partner
Moore Stephens Sydney
May, 2012
www.moorestephens.com.au
Serious about Success®
Getting the best out of your plan
4 Key messages from the workshop
1. Your Employee’s will not see value in the share plan unless they
understand it;
2. Unless employees see value in the plan, it wont have the desired effect
(retention, reward, alignment etc);
3. Communication is the key to getting the most out of your plan
4. Communication must be in a way that employees can understand and
relate it to their own situation
Agenda
Effective Communication of Employee Share Plans
• Share Based Remuneration – Objectives and Failings
• What needs to be communicated
• How do you best communicate the plan to your people
• Outcomes of effective communication
• Our Services
Objectives
Key objectives of any share plan should be:
• Align the interests of employees with the group/ company;
• Align the interests of employees with shareholders;
• Provide a sense of engagement and ownership;
• Act as a retention and attraction tool.
Failings
Based on recent studies, the key failings of ESS plans,
were be as follows:
• Employee lack of knowledge/ understanding of the plan;
• Employees seeing no value in the plans;
• Investment market linked;
• Employees not understanding vesting and taxation considerations;
• Often ‘unclear’ plan benefits;
• Offer documents are complicated and difficult to read, especially for less
financially literate participants.
Many of the failings are based upon employees not understanding
the plan……communication is the key
What Needs to be Communicated?
Key items that will need to be communicated well to
obtain maximum benefit:
• Why the plan is in place
• Plan Design
• How securities are allotted
• Performance Hurdles
• Vesting provisions
• Taxation Treatment
• Long Term benefits
• Planning considerations
Method of Communication
Effective methods of communication:
• Briefing sessions
- Delivered in ‘layman’ terms
- Capturing all the key information re allotment, vesting, taxation, use post
vesting, planning opportunities etc.
• Information Memorandums
- Summary of offer documents
- FAQ’s
• Calculators
- Value over time
- Benefit of use
Method of Communication
Effective methods of communication (cont.):
• Broadcasts from key management personnel
• Registry accessibility
• Survey
• Specific Point of Contact
Method of Communication examples
‘FAQ’ documents
Method of Communication examples
‘Tax information’ documents
Method of Communication examples
Calculators
Method of Communication examples
Employee surveys
Employee Needs Assessment
Method of Communication examples
Participant wide broadcast
Outcomes of Effective Communication
• Greater Understanding of Plan
• Greater Employee Engagement
• Value in administrative expense
Survey your people…….before and after…….
MSS Services
• Specific Briefing sessions – covering all the required items
• Information memorandums, including:
– ‘Frequently Asked Questions’ document
– ‘One Page’ explaining design and benefit
• Calculators
• Survey’s
• Tax Guides
• Reporting Statements
• Contact Line for participants
• Offer of one-on-one meetings for all participants
• Accounting and Valuation Services
• Plan Design and Construction