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For the company, a major benefit of the scheme was the ability to align employees under its various divisions to the wider Kingfisher brand. Everyone is starting to think in a team way. Executive share plans are very different from all-employee models, such as sharesave or a share incentive plan. In the past, many executives would have been rewarded through company share option plans, says William Cohen, partner and head of the share plan practice at Deloitte.
In such schemes, there is less emphasis on education and promotion, but it is important to keep executives informed as to how they are faring against the performance conditions, says Sophie Black, principal, executive remuneration, at Mercer. Sue Wilson, director of human resource services at PricewaterhouseCoopers, says it is important that performance targets are not too complicated.
Share ownership creates a bond between employer and employee, and corporate branding can strengthen the communication of schemes, says Nick Martindale. The issue of employee ownership in organisations has become topical following pledges by prime minister David Cameron and deputy prime minister Nick Clegg to make it easier for staff to take a stake in their employer and benefit from its success.
Staff who either invest in or are given shares, usually through a share incentive plan, or take part in a save-as-you-earn plan such as sharesave, are likely to be more engaged and productive, as well as being more minded to stay put for a reasonable period of time.
