Online retailer AO World is to introduce a profit share scheme for its 3,000 employees.
The incentive, which is set to be implemented during the 2020/21 financial year and has been named the Value Creation Plan (VCP), will give employees the opportunity to receive an extra payment, if any value is created above the set share price of £5.23 million, equivalent to a £2.5 billion stock market value.
All employees, including executive directors, will be eligible for the scheme. The plan will fund 10% of the value created above this threshold: 3% of this will be rewarded to the two current executive directors and chief operating officer, while the remaining 7% will be designated to current and future employees that choose to invest in the organisation.
These payments will expire upon the end of an employee’s contract with the business and the board will be able to allow payouts to be delayed or cancelled in exceptional circumstances.
Geoff Cooper, chairman at AO World, said: “We are seeking to implement a VCP in which all employees of the business will be rewarded for creating exceptional value. As Luisa Delgado, chair of the remuneration committee, states, we believe that such an innovative all-employee model reflects the unique and collaborative culture at AO World, and its core role at the heart of our business; it will help galvanise the team and drive the business further forward.”