Reward & Share Plans

An Employee Share Scheme (sometimes referred to as an Employee Share Ownership Plan, or ESOP) is a way of sharing company ownership with your team. You can reward one or more key people with equity, or all of your employees. That’s entirely up to you. In an Employee Share Scheme employees hold, or have the opportunity to hold, shares personally, normally alongside other shareholders. Employees can be offered shares or they can be granted options which can be exercised at a time to suit the employee.

Reward and Share Plans

  • Reward strategy development and implementation.
  • Short and long term incentive plan design.
  • Broad based employee stock plans
  • Global stock plan design and roll-out.
  • Compensation and benefits harmonization.
  • Target operating models and processes for Reward.
  • Recognition plan design.
  • Building in-house reward capability.
  • Interim reward management.
  • Fair pay agenda: CEO, ratio gender and ethnicity pay gap reporting

Pay Rise Logic

Inflation is now a fact in many western economies. After decades of low inflation, the implications for pay need to be revisited.
When inflation bites, “a pay rise for all ” might be the first thought. But first consider:

  • Rising cost of living hits the lowest paid the most.
  • Rising labour costs mean price rises, or less profit;
  • And so maybe more mechanisation and fewer jobs.

In normal times, a price increase signals more demand than supply, a signal for supply to increase. Inflation price rises happen alongside that process and cannot be untangled.

Your customers too face higher wage costs at the same time as you want to pass on to them your own increasing costs. Passing on your extra wage cost is not so simple.

But inflation is a business fact and cannot be ignored. Predictably, minimum wage and living wage figures will rise, that will impact differentials and the market rate. There are time lags; but the upshot will show in pay survey figures as well. So, beware of double counting.

Executive compensation is less impacted by inflation. The standard of living for the higher paid changes less than the lower paid, as the cost of essentials such as food and energy rise.

Performance pay forms a higher part of their total package; so, if a rise is needed, investors will expect that in performance pay opportunity, not base pay alone.

Reward and executive compensation management is difficult even with steady state prices. Inflation adds an unwelcome extra dimension. When inflation was last a headache, reward practices were very different to today.

The “pay rise all round” thought will not be sufficient. A more nuanced response, recognising business circumstances, larger pay differentials, bigger pay bands and more emphasis on pay for performance profile are more likely.

Pay rise logic spider diagram

A more creative approach to growth pay is often needed

“Great business models can reshape industries and drive spectacular growth. Yet many companies find business-model innovation difficult.”
Cleyton M. Christensen
Kim B. Clark Professor of Business Administration
Harvard Business School

 

Regular executive pay

  • Pay policy covers top team on common basis​​
  • Quantum survey benchmarked against market​
  • Balanced mix of fixed and incentive pay​​
  • Incentives offered each year​
  • LTIP mainly performance shares​
  • LTIP vest after 3 years ​
  • Vesting metrics apply (return and growth measures)

Growth pay

  • Strong differentials. Big focus on founders and executive management teams​
  • Pay set from absolute delivered value. On success, much ahead of market​
  • Pay mix skewed strongly towards incentives, particularly for top team​ and LTIP​
  • LTIP offered on a block grant basis upfront (with pool holdback)​
  • LTIP mainly Founder shares and options​
  • LTIPs vest on exit event (or long stop date)​
  • Vesting is exit-centric; but sometimes mixed with other metrics.​

bec.bostock@corpgro.com

07989 337118

Robert Head

Lead Consultant

Robert works with organisations of all types as a reward consultant or interim reward professional providing reward solutions, interim management and consultancy.​
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Robert is experienced in working across multiple sectors (including public listed, private equity, commercial, financial, non-profit, and charity).​
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Robert has deep subject matter reward experience in corporate governance, executive reward, remuneration committees, reward strategy, reward policy, annual bonus, long-term incentives, transformation and change, corporate actions, mergers and acquisitions, and restructuring.​
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Robert is experienced in stakeholder management working closely with Chairs and executive directors including CEOs and CFOs, non-executive director members of remuneration committees, members of executive committees including business unit CEOs/Presidents, senior HR business partners and other line executives, senior management in other organisations, outside specialists and advisers, and investors.

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Robert Head Corpgro

Jane Allen

Lead Consultant

Jane has over 30 years of Reward experience within listed multinational organisations and consultancy environments.​

Her expertise covers Total Reward (strategy and programmes), benefits & wellness, pensions, executive compensation, Remuneration Committee support, annual and long-term incentives, VCPs (value creation plans), M&As and restructuring.​

Jane has successfully established reward teams and best practices for all key reward processes, leading on complex local and international issues across UK and US listed, family owned, and PE backed ownership structures.​

She has a keen interest in ESG and how this can be reflected within Executive Pay to align with the long-term sustainability of businesses. ​

Jane is a Fellow of the Pensions Management Institute and a Chartered Insurer. She is an independent Trustee for The Economist Pension Plan.

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Damian Carnelll

founder director

CORPGRO is a reward consultancy specialising in executive incentives particularly those connected with growth; and ESG.​

Damian has extensive experience advising leading companies on all aspects of executive compensation and equity plans. He was previously with Willis Towers Watson, Aon, and Ernst and Young. ​

Damian’s extensive experience in executive compensation and equity plans means he is fully familiar with Corporate Governance norms, institutional shareholder views and proxy voting both advisory and binding.

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Damian Carnell Corpgro