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Serious about Success ® Communicating Employee Share Plans Workshop – EOG Conference www.moorestephens.com.au Charlie Viola, Partner Moore Stephens Sydney May, 2012
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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
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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
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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.
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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
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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
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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
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Method of Communication Effective methods of communication (cont.): Broadcasts from key management personnel Registry accessibility Survey Specific Point of Contact
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Method of Communication examples ‘FAQ’ documents
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Method of Communication examples ‘Tax information’ documents
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Method of Communication examples Calculators
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Method of Communication examples Employee surveys Employee Needs Assessment
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Method of Communication examples Participant wide broadcast
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Outcomes of Effective Communication Greater Understanding of Plan Greater Employee Engagement Value in administrative expense Survey your people…….before and after…….
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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
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