1. RCU, Buckingham House, Glovers Court, Preston, PR1 3LS Tel 01772 885999 | Fax 01772 887336 | gaitken@rcu.co.uk Seminar 5: Linking employee ownership to reward and performance 10.123 Ownership, performance and reward at RCU - what works for us Gordon Aitken, Director RCU

2. RCU, Buckingham House, Glovers Court, Preston, PR1 3LS Tel 01772 885999 | Fax 01772 887336 | gaitken@rcu.co.uk Seminar 5: Linking employee ownership to reward and performance 10.123 About us – briefly! Customer surveys; staff surveys; market analysis; data mining; labour market info; stakeholder perceptions; income generation; customer relations management. Colleges and training companies Private sector clients

3. RCU, Buckingham House, Glovers Court, Preston, PR1 3LS Tel 01772 885999 | Fax 01772 887336 | gaitken@rcu.co.uk Seminar 5: Linking employee ownership to reward and performance 10.123 Previous Model (2002-April 2009) Managing Director Deputy Director EBT nominee 2 Non-Execs Right to attend for all other staff Salary bonus (equal for all staff) EBT group benefits (caravan, events) Reinvestment

4. RCU, Buckingham House, Glovers Court, Preston, PR1 3LS Tel 01772 885999 | Fax 01772 887336 | gaitken@rcu.co.uk Seminar 5: Linking employee ownership to reward and performance 10.123 Current Model (April 2009 onwards) Managing Director 3 Exec Directors (Elected A shareholders) 3 NEDs Right to attend for all other staff Dividend (equal for all staff) Staff Benefits Budget (group benefits) Reinvestment Share Ownership 17 voting shares awarded after 1 year’s service. 6745 capital owning shares (and 900 options) – 60 per year of service.

5. RCU, Buckingham House, Glovers Court, Preston, PR1 3LS Tel 01772 885999 | Fax 01772 887336 | gaitken@rcu.co.uk Seminar 5: Linking employee ownership to reward and performance 10.123 So what’s changed? This is what colleagues say Click hereClick here (you need to be running slide show)

6. RCU, Buckingham House, Glovers Court, Preston, PR1 3LS Tel 01772 885999 | Fax 01772 887336 | gaitken@rcu.co.uk Seminar 5: Linking employee ownership to reward and performance 10.123 Remuneration Structure

7. RCU, Buckingham House, Glovers Court, Preston, PR1 3LS Tel 01772 885999 | Fax 01772 887336 | gaitken@rcu.co.uk Seminar 5: Linking employee ownership to reward and performance 10.123 Benefits and (Potential) Problems Collective enterprise Motivation/innovation Cost control Self-adjusting remun. Peer group impact Reduced mgt cost Recruitment Transparency Development spur Longer perspective Initial legal/tax cost Slower decision-making Risk of “free riders” Disenchanted “top performers” Small company model – James Meade (1975) “employee-shareholder enterprises” c30? BenefitsPotential Problems

8. RCU, Buckingham House, Glovers Court, Preston, PR1 3LS Tel 01772 885999 | Fax 01772 887336 | gaitken@rcu.co.uk Seminar 5: Linking employee ownership to reward and performance 10.123 Final thought No structure works without genuine employee involvement... but most structures will work with it.