LAUNCHING A SUCCESSFUL WORLDWIDE SHARE PLAN. Part I

Transcription

1 LAUNCHING A SUCCESSFUL WORLDWIDE SHARE PLAN Part I

2 BIB Action 2013 Michelin case study Phil Ainsley, Managing Director, Employee Services, Equiniti Julie Freakley, Personnel Systems Information Manager, Michelin

3 Agenda 1. Who are we? 2. What were our goals? 3. Introducing the worldwide plan 4. Why we utilised the UK SIP 5. How we communicated the plan in the UK 6. What results did we achieve?

4 Who are we? Julie Freakley, Personnel Systems Information Manager and UK BIB Action 2013 project leader, introducing Michelin.. Michelin Group is a global leader in tyre and travel-related services markets Based in 170 countries Employing more than 110,000 people of 120 different nationalities Over 171 million tyres produced annually in 67 sites in 17 countries (Data at 31 December 2013)

5 Who are we? Phil Ainsley, Managing Director, Employee Services, introducing Equiniti.

6 Working together in Partnership Michelin and Equiniti combined on this project to deliver: A new application service for Michelin employees Edited Group documentation to communicate the UK specific plan We worked very well together to ensure we delivered to timescales and to ensure that the communication material was both informative and engaging.

7 What else have we have done together? Michelin and Equiniti have combined to offer the following services to Michelin employees: Offered a BIB Action Employee Shareholder Plan (SIP Invitation) in 2002, 2003, 2008 and 2013 Managed an annual dividend service (both DRIP and cash) Facilitated a share sale service through Société Générale Issued annual statements to participants Managed leavers

8 What were our goals? Why did Michelin introduce a fourth employee share plan? Goal one To develop sustainable employee commitment and performance. Goal two To share performance by offering competitive savings to employees. Goal three To strengthen Group governance and cohesion.

9 What was offered within the worldwide plan? Eligible Employees Over 95,000 were invited to join the plan across 50 countries Subscription period The subscription period: 4 18 November 2013 Reference price and Discount Reference price of 24 October 2013 based on 20 day average: 80,05 A 20% discount was applied to the reference price: 64,05 Company Contribution Further discount 1 to 5 shares, 75% 6 to 10 shares, 50% 11 to 15 shares, 25% 16 shares & beyond, initial discount applies (64,05 )

10 Worldwide matching share ratio explained

11 Considerations Legal and tax Eligible employees Secondees/expatriates Specific offers UK/Ireland Italy Hungary

12 Why we utilised the SIP in the UK What is the Share Incentive Plan (SIP) and why we introduced it in the UK.. The SIP is a UK tax advantaged plan Deductions are taken from pre tax salary and become fully available from tax after 5 years The SIP was offered as part of the 2002, 2003 and 2008 plans Over 800 UK employees were already participating in the earlier SIPs The matching ratio was tailored from the worldwide Michelin Employee Shareholder Plan to adhere to the SIP rules, as shown overleaf

13 UK SIP Matching Share Award explained

14 Communicating the UK SIP Plan Champions Michelin appointed 53 plan champions called Relays, who received training, support materials, booklets and videos Information was then passed to 92% of colleagues via posters and powerpoint presentations Intranet and payslips Michelin provided detailed plan information on its Company intranet This included a simulator, where employees could input their monthly amount to obtain an estimate of the impact on their monthly net pay New Portal Equiniti introduced a new Portal, which enables employees to: Apply online View existing holdings Sell existing shares Invitation Packs Invitation packs were issued at the same time as the worldwide packs in October, and included: A detailed 16 page Brochure Application Form Business Reply envelope Acknowledgement card

15 Success! What results did we achieve in the UK in 2013? The chart shows that nearly 50% of eligible employees now participate in the UK SIP: 42.8% took up the offer in 2013 An increase of 44% from the 2008 BIB Action 596 new employees joined the SIP in 2013

16 Success! What did this mean in relation to the worldwide Plan? The final subscription rate for the worldwide Plan was 54.3% Despite lower subscription rates in North America and in South America There were some very strong success stories in Asia (China 74% and India 69%) The first invitation in Serbia received an incredible 89% subscription rate

17 Summary and what happens next? Our core aims for this project were to increase employee engagement through the Relay process and to develop employee commitment and performance by aligning interests of the employee participation in the plan. We were therefore delighted by the increased take-up. We now look forward to offering the SIP as a vehicle for the UK plan for future BIB Actions. Michelin achieved an excellent subscription rate in the UK of 42.8%. It s a great demonstration of what can be achieved through good team work.

18 Any Questions?

19 Thank you Julie Freakley Michelin Phil Ainsley Equiniti

20 LAUNCHING A SUCCESSFUL WORLDWIDE SHARE PLAN Part II

21 Rio Tinto Global Share Plan a unique journey Rasmus Berglund, CEP, Managing Associate, Linklaters LLP Martyn Drake, Director Share Plans, Computershare Pat Sims, Principal Adviser Share Plans, Rio Tinto plc

22 How did it all begin? Existing Rio global offering why change? Global employee engagement survey Guiding principles: Create an incentive to attract, reward and retain Encourage employee ownership Reinforce corporate identity and group values Stakeholder consultations, meetings and a lot of brain storming

23 Scope 56,000 employees in 39 countries 7 key countries (Australia, Canada, France, Namibia, South Africa, UK and USA) Structure - share saving vs. share purchase Costs simplicity vs. country specific Providing tax-qualified benefits, where possible

24 Design considerations Country Due Diligence Share Plan Objectives Market Analysis Global Share Plan Design Guiding Principles

25 The Plan For every Investment Share purchased, one free Matching Share Investment Shares held by nominee Matching Shares vest subject to continued employment and retention of Investment Shares Automatic Dividend Shares accrual (incl. on Matching Shares) Provision of Fractional Shares Eligible leaver provisions

26 Communication 56,000 employees speaking 13 different languages Personalised information packs Access to plan materials Dedicated employee intranet site Local plan champions Training, s, posters, videos, 24/7 hour support and much more

27 Challenges The African challenge The Fractional Share challenge The Australian and Canadian trust challenge The SAFE challenge The data privacy challenge The nominee challenge The impossible challenges - Russia and Iceland

28 Success! First year participation rate of over 26% Current participation rate of 30% Ifs ProShare Awards 2013 Best International Share Plan +15,000 employees I want to own Rio shares, and I like it that my employer wants me to be a shareholder and rewards me for my commitment

29 Questions?

30 Thank you Pat Sims Rio Tinto plc Rasmus Berglund Linklaters LLP Martyn Drake Computershare