Employee Benefits Awards 2010: Most effective all-employee share scheme strategy



This winning entrant from the transport sector runs two forms of all-employee share scheme: a share incentive plan (buy as you earn or BAYE) and sharesave (save as you earn or SAYE). These are run as integral to the firm’s overall employee savings strategy and, in particular, in conjunction with pension savings (as an alternative to pension savings).

The schemes are launched annually to maximise opportunities to join or to cash out and rejoin if the share price drops (in the case of sharesave).

In 2009 there was a particular focus on the under-30 age group, where take-up was low, demonstrating a lack of understanding between risk and potential growth. FirstGroup therefore split its communication strategy according to age group. For example, it used a magazine-style, simply-written booklet for the under-30s.
Its online interactive modeller is particularly simple to use, but stylish. It gives employees a clear view of the impact of savings levels, tax breaks and share price changes.

The overall strategy also focuses on the maturity of schemes, and not simply the launch, as so many do. By working hard to help younger staff understand the benefits of saving into share schemes, FirstGroup saw a 63% rise in share incentive plan participation among the under-30s, which now exceeds other age groups.

Sharesave take-up figures were its best ever, despite – or perhaps because of – the recession. It was more than 200% oversubscribed and record numbers of staff requested the highest level of savings allowed. All this for £20,000 spent on communications for the 36,000 workforce. One judge said: “This is a scheme to be proud of.”

Runners up
Cadbury Sharesave 2009
(entered by Computershare Plan Managers, formerly HBOS Employee Equity Solutions)
The culture of share ownership at Cadbury is long-standing and is clearly aligned to business strategy with the aim of engaging staff in the business. More than half of staff take part in the sharesave and share incentive plans, and many do so year after year. This entry focused on making communications more environmentally friendly, removing the seven-year savings option and increasing participation. A total of 22% of participants were new.

Centrica 2009 Sharesave scheme and share incentive plan invitation (entered by Equiniti)
There was a strong emphasis on using the share incentive plan (Sip) to help strengthen corporate identity because many parts of the business did not identify with being part of Centrica. The launch strategy had many elements new to the firm: combining the schemes, increasing the number of population categories, updating the website, the use of SMS, reducing the eligibility period, adopting a retail approach, and providing a financial education programme. The judges felt this is more than most companies do in five to 10 years, let alone in one year. Applications for the Sip jumped from 540 in 2008 to 1,410 in 2009 – a 161% increase.

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Childbase Childbase all-employee share plan (Casp)
This childcare firm has the strategic aim of becoming employee-owned. It has built on this strategy over the past nine years, so staff now own 50% of the company. Employees can convert annual bonuses into shares or take them as cash, and free shares have to be held for three years before they can be sold. Although it is difficult to draw an exact conclusion in terms of staff retention, there appears to be a correlation to the – low for the industry – level of 22.92%.

See full list of winners and finalists for the Employee Benefits Awards 2010