The Global Equity Organization Australia Chapter Meeting Welcome

Transcription

1 The Global Equity Organization Australia Chapter Meeting Welcome Melbourne 5 th May GEO Awards, London UK

2 Melbourne 5 th May 2016 Best of Boston ESS Reporting 2015 GEO Awards, London UK

3 AGENDA Welcome and introductions GEO Best of Boston The Highlights Communications Plan Design/Strategy/Motivation Global Hotspots/Update Mobility New ESS reporting Ask the audience GEO half day events 3

4 Member Driven Not-for-Profit Organisation CURRENT SERVICE OFFERINGS Conferences and Regional Events Global Equity Insights Survey Regularly Scheduled Webcasts GEO Awards Chapter Meetings and Events GEOconnect GEO News and GEO Blog LEARN about crucial information, news and developments that can help you succeed and advance in your careers. CONNECT with experts and peers from around the world and next door to share best practices and develop valuable relationships that endure. EXPERIENCE a welcoming atmosphere that fosters meaningful dialogue and relationships. 4

5 The Member Benefit you can't do Business Without! The GEO member only, private and secure online community. Interact with GEO members around the world wherever and whenever you need to: CONNECT and communicate with fellow members PARTICIPATE in focused discussion groups ACCESS useful and informative document libraries NETWORK via a comprehensive member directory CONTRIBUTE to member blogs and create your own SHARE files and post questions online

6 CONFERENCES and REGIONAL EVENTS Mark your Calendar 18 th Annual Conference, April 2017, Rome, Italy N. California Forum, 9 June 2016, San Carlos, CA Melbourne Regional Event, 11 October Sydney Regional Event, 13 October Pan European Regional Event, November 2016, London, UK CHAPTER MEETINGS 3 May Sydney 5 May Melbourne 20 May Netherlands WEBCASTS 5 May Global Equity Updates 26 May Academic Research in Executive Compensation: 2016 Update 6

7 Thank you for attending! 7

8 COMMUNICATIONS Hamish Wallace MinterEllison 8

9 COMMUNICATIONS Sessions: Information is not communication Nokia & Unilever Just a Walk in the "Pawk" Getting Your Communications Right for ALL Your Employees (From the CEO to the Receptionist) Intertrust Group 9

10 COMMUNICATIONS Information is not communication Nokia & Unilever 10

11 COMMUNICATIONS Unilever Executive Plans LTIP Matching Plan (174,000 employees) Share Purchase Plan (103 countries) Nokia Executive Plans: Performance Share Plan (4,370 employees in 74 countries) & Restricted Share Plan (900 employees in 29 countries) Employee Share Purchase Plan (Matching): 57,000 employees in 46 countries 11

12 COMMUNICATIONS Both companies had strong equity compensation culture Key communications strategy was explaining the share plan journey Share in our Future Share in Success Challenges Access to communications Share plan language 12

13 COMMUNICATIONS Solutions A consistent visual message Standard communications ( s; brochures) Sponsorship and local level support Training and workshops Unilever share plan champions in each country Nokia face to face meetings; enrolment countdown on intranet 13

14 COMMUNICATIONS Just a walk in the pawk Getting your communications right for ALL your employees Intertrust Group 14

15 COMMUNICATIONS Journey from PE ownership to listing Three plans Executive Ownership Plan Employee Share Ownership Plan LTIP 164 managers held 25% of the shares Level of knowledge varied across three plans Key driver address key retention and retain ownership culture Communication matrix Communications depends on company and employee profile 15

16 COMMUNICATIONS Executive Ownership Plan Senior Manager sophisticated investors CEO s Executive offsite Tax ruling Direct Q&As EOP mailbox Use of consistent information and terminology 16

17 COMMUNICATIONS Employee Share Ownership Plan 1,649 employees Had to be simple Design: free shares with one year vesting period Communications: light documentation; celebratory Direct interaction with employees: breakfast meetings; live IPO streaming; CEO invitation; local HR briefings Simple award agreements; FAQ; tax summaries consistent objective and purpose IPO movie; celebration updates; online acceptances 17

18 COMMUNICATIONS LTIP 204 Senior Managers Retention mechanism local Managing Directors drove message (training for MDs) Documentation: more focus on performance hurdles Default revocation had to accept to participate Reminders: EPS growth; financial updates Challenges Communication of EPS performance hurdles Moving timelines: needed continued, clear and consistent messages 18

19 PLAN DESIGN/STRATEGY/MOTIVATION Joanna Mak Brambles 19

20 PLAN DESIGN/STRATEGY/MOTIVATION Motivation something that causes a person to act in a certain way, do a certain thing; incentive.

21 PLAN DESIGN/STRATEGY/MOTIVATION

22 Motivation Theories and Research

23 PLAN DESIGN/STRATEGY/MOTIVATION

24 PLAN DESIGN/STRATEGY/MOTIVATION vest vest

25 PLAN DESIGN/STRATEGY/MOTIVATION

26 PLAN DESIGN/STRATEGY/MOTIVATION

27 How will changes in generational employee mindset impact incentive compensation?

28 Key Take Away: The current share plans designs - does it sufficiently / efficiently motivate employees? If there are better ways to motivate employees, how do we combine it with equity incentives that will satisfy both Board and employees needs? If one size does not fits all - employees from different countries / cultural background - different generation in the workplace - male vs female When s the tipping point that we start to build share plans that are specific to different needs?

29 GLOBAL HOT SPOTS/UPDATE Erica Kidston Baker & McKenzie 29

30 Global Hot Spots/Update Tax Changes More countries bringing in favourable tax regimes for equity France Tax advantaged RSUs but need shareholder approval Denmark tax deferred until sale of shares, capital gain not employment income Canada negative changes previously announced may not proceed Reporting and withholding New Zealand reporting and optional withholding (1 April 2017) Many companies using exact tax rates to work out amounts to withhold globally and not using average/maximum rate 30

31 Global Hot Spots/Update Registration China State Administration of Foreign Exchange (SAFE) Filing must be made in province where issuing company has legal subsidiary Shanghai SAFE becoming more restrictive rejecting applications unless a real presence in Shanghai extensively reviewing prior grants Other SAFE offices more difficult Different requirements between SAFE branches (e.g. Beijing) UK Increased audit activity Luxembourg new tax notification requirement EU prospectus update new Regulation to relax requirement not expected to be effective until late 2017/early

32 Global Hot Spots/Update Data Protection Trend is towards increasing laws and scrutiny EU/US safe harbour ruled invalid, new framework agreed Russia data must be stored on servers in Russia, but can be transferred overseas with employee consent Foreign Exchange Becoming easier in some countries (e.g. Argentina, India, South Africa, Vietnam) China still difficult (Chinese currency under pressure: SAFE not allowing money out indiscriminately) 32

33 MOBILITY June Davenport Solium 33

34 Mobility Sessions Walmart Case Study: Equity in Motion! Equity and Mobility: The Evolution of Automation (Facebook) Getting the Recipe Right Adding Business Travellers to the Mobility Mix (Eli Lilly) Practical Guide to Managing Short Term Business Travellers (Prudential USA) 34

35 MOBILITY The Lesser Challenge 1 2 Pre August 2011 September 2011 March March 2015?

36 MOBILITY The Lesser Challenge Regulations expect compliance for IA s/ex pats permanent relocation, US state to state movements Recognition that advances in systems/technology support reporting for the groups noted above Payroll normally supports this population Formal programs and policies in place at many companies Dates for movement largely known Majority of companies compliant 36

37 MOBILITY The New Challenge Business Travellers Why? Government entities now sharing information Easier access to data Complexities Who is travelling Where are the hot spots? Reporting and tax filings Telecommuters? 37

38 MOBILITY The New Challenge 4 Calgary April 2 Boston April 3 New York April 1 Sydney

39 MOBILITY Considerations Thresholds Day and/or dollar de minimis Counting of days varies Income tax treaties Also awareness when no treaty exists Filing requirements UK: Appendix 4 Canada Tax withholding waiver 39

40 Business Travellers Unique Challenges Data to track mobility Work locations, payroll locations, residency, other? How to collect mobility data? GPS, self reporting, expense reports, badge swipes etc. Where is mobility data stored? HRIS, Tax Provider, Other third party When do you use the mobility data? All employees, segment of employees, what types of transactions What is the employee experience 40

41 Mobility - Business Travellers Considerations Cost of compliance Senior management travellers Value of equity grants can be considerable Significant travel to contentious states/countries Audit history Risk profile Focus on high risk populations and jurisdictions Compliance for business travellers increasing Facebook, Prudential, Elli Lilly, Walmart Use technology 41

42 2016 ESS REPORTING SEASON Rob Basker & Tommy Sanjaya Deloitte 42

43 GEO October Half Day Events Mark your calendars Melbourne: October 11 th Sydney: October 13 th Content Communication Tax and regulatory updates Data privacy Plan strategy/design Case studies Other (survey results, multi generational work force) 43