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Why Employee Ownership?

Why Employee Ownership?. Succession not survival Employees should be able to influence decisions that affect them Share in success of the company Openness of information, particularly financial Involvement and participation helps improve productivity and handle difficult decisions.

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Why Employee Ownership?

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  1. Why Employee Ownership?

  2. Succession not survival • Employees should be able to influence decisions that affect them • Share in success of the company • Openness of information, particularly financial • Involvement and participation helps improve productivity and handle difficult decisions

  3. Wealth spread • employees have financial stake rather than families with capital • Understanding of the business • “Ours” rather than “Theirs”

  4. Russell Trust Russell Trust Employee Trusts Employee Trusts Russell Trust Employee Trusts 28% 48% 24% Employees Direct Employees Direct Employees Direct TR Ownership: Current

  5. Share Council • Represents employees as shareholders • Means of communication • Sell “employee ownership” • Work with Group Board

  6. Share Council • Representation • Elected Employee shareholder representatives • One Share Councillor for every 100 employees • Half of the Trustee Directors are elected from Share Councillors • Meetings every quarter • Twice yearly meetings with Board • Twice yearly meetings with MDs • Study seminar - annual weekend

  7. Share Council • No conflict between share council and trade unions/works council • clearly defined boundaries • share council

  8. Communication • Joint presentations with managers • Monthly briefing • “TRQ” the group magazine • Share Scheme Hotline • AGM and Roadshows • All minutes, agendas and notices posted on notice boards • e-mail • newsletter

  9. Work with Group Board • Share Council • Actively involved in new SIP scheme • Based on equal allocation of shares • long term aim of Share Council • Consulted on major issues • Purchase of Hot Pesss • Acquisitions and disposals worth 5% of company value • Input into HowardsWay • Dividend policy • Share option schemes

  10. Tullis Russell Share Price As you can see, share prices can go down as well as up

  11. SIP (Share Incentive Plan)

  12. SIP • Administered by a trust • Designed by group board and share council • To give employees a continuing stake in your company • Inland Revenue approved

  13. Scheme Details • Employees get shares by one or more of the following methods: • Free shares • Partnership shares • Matching shares

  14. Free Shares • Each year at share window • Based on profitability of the company • Equal distribution • Depending on length of service in financial year • Receive dividend • Receive one vote for every share held

  15. Partnership Shares • Attractive saving scheme to buy shares • Bought with pre-tax & NIC earnings • Maximum £125 per month • Receive option over number of shares • Stop and start once during 12 month period • At end purchase shares at option price • UNLESS price goes down • If so then purchase at lower price • Refund of surplus savings • No waiting period

  16. Matching Shares • Only if Company decides to offer • Up to two free for every Partnership Share purchased

  17. Holding Period & Leavers • Five years or you pay tax • Special rules to protect “good” leavers • No forfeiture of shares • When you leave you cannot get any more shares • Cash compensation for “good” leavers

  18. Other Opportunities • Employees can purchase shares • SAYE Scheme if offered

  19. What decisions do I need to make? • Join scheme • Free shares • Partnership shares • Buy shares • Fill in forms • Phone Markinch Hot Line 323

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