Brambles Global Employee Share Plan
Phil Turss
Group Vice President
Remuneration & Benefits
Employee Ownership Group
10 May 2012
Agenda
•
Brambles overview
•
Commitment to share ownership
•
Brambles global employee share plan – MyShare
•
Plan design – Global std vs. local customisation
•
MyShare – Key strengths and key challenges
•
Global employee share plan costs
•
MyShare participation
•
Where to over the next 3 years?
•
Key learnings
•
Does employee share ownership drive employee engagement?
2
Brambles overview
• Brambles is named after Walter E. Bramble who established W E Brambles
& Sons in 1890 as a carrier service between Sydney and Newcastle
• Listed in Australia with Sydney HQ, and major Regional head offices in
Orlando and Atlanta, USA and London, UK
• Business size:
– 17,000 employees worldwide
– Operates in 54 countries covering Americas, EMEA and Asia Pacific
– Sales last financial year were US$4.7B
3
Brambles overview (cont’d)
Brambles three main businesses are:
– CHEP is a global leader in the provision of equipment pooling
services, managing approximately 300 million pallets and
containers on behalf of its customers to help them transport
products safely and efficiently.
– Recall manages the secure storage, retrieval and destruction of
physical and digital information for approximately 80,000
customers worldwide.
– IFCO operates a pool of approximately 116 million reusable
plastic containers worldwide and, in the USA, sorts repairs and
reissues almost 200 million pallets a year through its national
pallet management network.
4
Our commitment to employee share ownership
• Brambles has a long history with employee share plans
• In 2008 we developed a new global remuneration strategy
• Employee share ownership is a key part of that strategy
• Board Remuneration Committee and senior management commitment
• Major shareholder support
5
Brambles global employee share plan - MyShare
• Introduced in late 2008
• Key principles:
– All employees can participate (Blue collar worker through to CEO)
– Same plan worldwide
– Post tax annual purchase of between AU$100 and AU$5,000
– One-for-one matching of shares purchased and held for 2 years
– Rewards employee investment in the company
6
Plan design- Global std vs. local customisation
• A key principle of MyShare is “one plan worldwide”
• Pros:
– Same treatment for all
– One set of plan rules approved by shareholders
– Supports global mobility
– Avoids constant “gaming” to seek out tax minimisation loopholes
– Substantially reduces the cost of the plan
• Cons:
– May not maximise individual country tax rules
7
MyShare – Key Strengths
• Encourages share ownership from our
employees
• Affordable to employees (Low annual min)
• Gives a global identity for employees as part of
the Brambles Group
• Strong EVP – worldwide benefit with a single
plan for all
• Assists employee retention
“MyShare participants as a group are
now our 20th largest shareholder”
8
MyShare – Key Challenges
• Offered in 45 countries supported by
84 payrolls
• Different languages
• Differing tax regimes
• Share ownership not a way of life in
some countries
• High levels of participation in a small
number of countries
9
Global employee share plan costs
• Delivering a global employee share plan
is expensive
– Legal & Tax Due Diligence costs
– Expatriate tax issues
– Communications
– External & internal administration
costs
– Cost of providing the Shares
• If you want to deliver the goods, you
need to pay the freight
10
MyShare – Participation rate to date
Participation over 40%
Participation between 11 - 39%
Participation of 10% or less
11
MyShare – Where to in next 3 years?
We believe we can achieve 40-50% participation overall:
•
To date most communication has been electronic via webinars
•
Enhanced communication via a “road show” to major countries
•
Shareholder approval to occasionally increase the level of matching
+
MyShare – Key learnings
• Set your principles from the outset
– Principles will drive the strategy
• Good relationship with the external administrator is essential
– It is too complex to administer without good systems and processes
13
MyShare – Key learnings (cont’d)
• Strict ground rules are important in
reducing admin costs
• Don’t be guided by anecdotal
complaints or requests based on
individuals
• Don’t leave it to a single source of
communications
14
Does employee share ownership drive engagement?
• Any evidence?
• In isolation, it is not a panacea for delivering higher levels of engagement
• To be effective, employee ownership needs to become an on-going feature
of the company's remuneration and employee engagement strategy
• Major commitment from the Board and management is a key to its success
15
Questions & Answers