presentation to idc conference 24 – 25 june 2012
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Presentation to IDC Conference 24 – 25 June 2012 The impact of various legislative frameworks on Effective and Sustainable Employee Ownership Model (US, UK and Australia examined). Key Impacts on Employee Share Ownership. Securities and Corporations Law Foreign Exchange requirements - PowerPoint PPT PresentationTRANSCRIPT
Presentation to IDC Conference24 – 25 June 2012
The impact of various legislative frameworks on Effective and Sustainable Employee Ownership Model (US, UK and Australia
examined)
2
Key Impacts on Employee Share Ownership
Securities and Corporations Law
Foreign Exchange requirements
Tax legislation
Market sentiment
Executive remuneration structures
3
The Regulatory Landscape
4
The Tax Landscape
0
1
2
3
4
5
6
US
UK
Australia
S423/ESPP S423/ESPP implemented in implemented in 19641964
ESOP ESOP implemented implemented in 1974in 1974
SAYE/APSS SAYE/APSS implemented implemented in 1980in 1980
CSOP CSOP implemented implemented in 1984in 1984
EMI & SIP EMI & SIP startstart
APSS tax APSS tax effectiveness effectiveness removedremoved
Tax exempt Tax exempt and Tax and Tax deferred deferred plans start plans start 19951995
Exemption Exemption raised to raised to $1,000$1,000
5
Number of Plans in Operation
6
Participant Numbers By Country
7
Percentage of the Labour Force that Participate
8
The UK Landscape
9
UK Participation Numbers Per Plan
10
UK Trends in Plan Types
11
The US Landscape
12
US Current Trends
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
IncentiveStock Options
Non-qualifyingOptions
StockAppreciation
Rights
RestrictedStock
RestrictedStock Units
13
US Option Plans Changes
Type of Change Percentage of Companies
Reduce the number of employees receiving options 48%
Reduce the total number of options granted 44%
Replace some/all options with restricted stock 33%
Replace some/all options with performance based stock 19%
Replace some/all options with long term cash incentives 13%
Replace some/all options with stock appreciation rights 5%
Replace some/all options with shares 1%
Other change 8%
14
US ESPP Trends
0%
10%
20%
30%
40%
50%
60%
70%
80%
3% or lesscontributed
3 - 5 % 5 - 8% Over 8%
Employee
Manager
Executive
15
ESPP Trends
Type of Change Percentage of Companies
Eliminate the “look-back” feature 26%
Reduce the discount on stock purchase 24%
Eliminate the plan entirely 17%
Other 7%
16
The Australia Landscape
17
Australia – The Number of Plans that Companies Operate
12
34+
2009
2010
2011
0%
10%
20%
30%
40%
50%
60%
2009
2010
2011
18
Employee Plan Types Used in Australia
TE FreeTE SalarySacrifice TD Salary
Sacrifice Other
2009
2010
2011
0%
10%
20%
30%
40%
50%
60%
70%
2009
2010
2011
19
Executive Plan Types - Australia
RightsOptions
SharesOther
2009
2010
2011
0%
10%
20%
30%
40%
50%
60%
20
Conclusions
The biggest impacts: Employee taxation Executive remuneration sentiment Market sentiment, costs for a company
Securities law can be the killer
Discussion