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Pearson SAYE Launches Guide
- 1. UK & International SAYE Launches Gabbi Stopp, Pearson plc
- 13. Sharesave Maturity Robin Kerner National Grid plc
Notes de l'éditeur
- Thanks Janet for your kind introduction. I’m really pleased to be here this evening to talk about Pearson’s SAYE plan. Employee share ownership is important to us as a company, we enjoy active support from our chief executive Marjorie Scardino. Our aim is to give every Pearson person a chance to own a stake (however small) in the company that they work for. SAYE is a safe, easily-understood and mostly tax-efficient method of achieving this.
- Set the scene by giving you a flavour of Pearson’s defining values, and show how they influence the way we operate our SAYE plan. Run through the key activities in our typical launch timetable Highlight some key things that in my experience you may need to watch out for Describe the post-launch activities we undertake & why we find these worthwhile Feel free to ask questions as we go through, time at end also.
- Pearson used to be a rather disparate collection of businesses, including Madame Tussauds, and a TV company that produced such gems as ‘Baywatch’ and ‘The Price is Right’…we’re now a much more closely-knit, cohesive group comprising the FT, Penguin and Pearson Education. Essentially, our stock in trade is knowledge and learning. Tempting to be cynical about company ‘values’ and ‘mission statements’ and what have you, but I actually find these three words pretty inspiring in their own right. What makes them meaningful is that people who work for Pearson do by and large embody these values, in small ways and in bigger ways. Brave – last year we worked with the UN High Commission for Refugees and local villagers to build a primary school in Kunduz province in Afghanistan. It’s staffed by six teachers (4 women, 2 men) who between them teach 270 children. The aim is to help undo the years of damage caused by the Taliban’s 1996 ban on schooling for females, and continuing lack of funding. E.g. in 2007 Afghanistan’s education minister stated that 60% of children were studying in tents or other unprotected structures. Education as a way out of poverty, future generations who will be rebuilding their country. Imaginative – breaking the Google stranglehold – how could web searches be better? FT’s ‘Newssift’ search engine…harnesses semantic search technology. This gives context to search results and categorises findings rather than merely presenting a list, topped with companies who’ve paid to have their sites listed first (that may not be what you’re searching for). Decent – when author Prof. Deborah Lipstadt wrote a book about Holocaust denial, mentioning the historian David Irving, he sued for libel. Penguin as her publisher, stood by her. Irving offered to settle out of court but Penguin (and Pearson) defended the case through court, and eventually won. It cost the company around a million in legal fees but the principle at stake – decency, supporting your authors - was & remains priceless.
- SAYE has been around for about 28 years now, and hasn’t changed a huge amount during that time. However, there are many different ways that we, as share plan managers, can operate and communicate our SAYE plans. Though I will touch on some technical points relating to legal and tax issues, much of what I cover will be specific to Pearson, the way we choose to do things, and why. My aim is to give food for thought rather than set out a definitive right or wrong way to do things. Our WWSFS plan rules act as an umbrella over several different versions of the plan – some tax-approved, some not. Our SAR plan awards are mostly equity settled with existing shares from our trust, but there remain some exceptions where we settle in cash, i.e. China. This may change as our employee population there continues to grow and the SAFE plan registration requirements therefore become more worth the effort/time/cost involved. Recently acquired ‘Wall Street English’ chain of English language teaching schools. No qualifying service period requirement – employed during invitation and on DOG. Quite an acquisitive company so this is important so that people can benefit from being part of Pearson ASAP. Presents practical challenges for us as far as operating the plan is concerned but not insurmountable by any means. List of countries changes each year – dependent on new acquisitions, and where the FT base some of their journalists according to news-worthy events around the world.
- This is our WorldWide Save For Shares website. We’ve operated the plan internationally since 1998, and it’s regarded internally as our flagship share plan. High profile, so unique opportunities and pressures stem from that. We were one of the first companies to launch SAYE online – it wasn’t a ‘nice to have’ for us, it was a ‘must-have’ given our scattered employee population. Our administrators at the time didn’t have an online product, so we developed our Share In Pearson site with our web designers who did our corporate website. Important to have a visual image-led way of conquering the initial language barrier for the landing page – hence the flags. One entirely unintended consequence from this design is that I can answer almost any flag-related question in pub quizzes! Individuals click on the flag of their country of residence and go through to subsequent pages, which are translated. People have a choice of which language they want to view the rest of the website in.
- Majority of work for the launch takes place within a six month period – January to June. March and April are the most intensive period for us. We have a very detailed timetable for our reference but to spare you the pain of digesting that much detail, here I’ve outlined the key activities by month. Results announcement was on 2 March this year – we have a 31 December financial year end.
- March & April’s work centres on communicating the plan. Coords as well as our people who are eligible to join. ‘ Lunch & Learn’ is our Pearson format for briefing our people on a variety of things affecting them, such as pensions, year end results, and of course share plans. Free food translates into greater numbers of bums on seats! Also makes for a more relaxed, informal atmosphere, where people are more likely to ask questions. We launch entirely online – paper is offered as a back up mainly for newly eligible employees, who join after the elig data is taken. Re-branded the entire plan last year – we did away with the common ‘cake’ and ‘piggybank’ images, replacing them with (chocolate) coins with the key company brands. Inclusive, meaningful, memorable. We carried forward that branding for this year, and expressed it slightly differently by using the coins as punctuation marks….went down well with our editors in particular (see themselves as defenders of correct use of English grammar?).
- These are excerpts from our four all-employee emails which we sent out during the course of the plan invitation…posters produced in pos / neg versions for ease of printing locally. Branded emails – with the coins logo and a Pearson blue background - headed ‘Don’t delete me – read on!’ Sounds obvious but has made a surprising difference. Vastly reduced no. queries from people saying they didn’t apply in time / didn’t receive emails…or more likely, ignored or deleted them. Compatible with both PCs and Macs. Share plans email inbox for direct/technical queries, encourage coordinator involvement.
- Our web designers built a webtool for last year’s launch, so we could monitor hits on the Share in Pearson site, and also applications made, by location code (opco/country/coordinator) in real-time throughout the invitation period. I could even access it on my Blackberry (yes, I’m that sad…). Useful for trouble-shooting individual locations if no hits on the site are measured, offer immediate, proactive support. Also good for keeping coordinators informed on take-up for their people, so they can see that their efforts are making an impact. Around 70% of applications are made in the last 4-5 days of the invitation period….despite a 17 day window this year! Option price calculated using average closing MMQ over three days preceding invitation date, less 20% (not all cos offer full discount now) French price calculated as 80% of the average share price over 30 days preceding DOG, defaults to the UK option price if that’s higher than the French one.
- Due diligence – fiddly filings, database registrations (Greece, Croatia), notarised documents (Philippines). Exemption wording in your Ts&Cs, docs / website for certain countries. Translation – France – 2007 launch – our then slogan of ‘take your share in Pearson’ plus cake image, somehow translated into ‘grab a tart’…which was not quite what we intended. Cultural differences – make them work for you! WWSFS would get zero attention from employees in Japan without perceived ‘endorsement’ from senior management there…not to stray into financial promotion but can be as simple as having a senior manager in the room for the employee presentations. Coordinators – recognise that coordinating WWSFS isn’t their day job or their central area of expertise. Our coords ‘day jobs’ range from Finance Directors in some of our opcos to HR Managers to PAs to general admin assistants. In our experience, the time invested in making the coordinators’ role easier is repaid many times over. Build a relationship, give them the tools and information to do the coordinator job well, give feedback and support. Local & historical issues – e.g. Argentine banking crisis of 2000/2001. Many people lost their own personal savings and still do not have any confidence in their country’s banking institutions. Important to address concerns & be honest about issues that are beyond your scope. We are currently pursuing a global savings arrangement, hope to be in place for next year’s launch.
- Compare take up to previous years’ – gives context and meaning to otherwise dull statistics. Good for award submissions too! This will be our second year surveying our employees using our webtool. Quite telling that last year as many responses came from non-participants as from participants. Anonymous but we do ask optional questions on demographics such as employing company, age, sex, location. Keep it short – focussed questions with multiple choice answers. Free format space at end for additional comments. Follow-up with an all-employee email sharing findings and highlighting some of the changes we’ll make in response. Review the process, open and honest discussion of what needs to be improved for next year. Continuous improvement. Last on this list but by no means least. Saying thank you for a job well done doesn’t happen as much as it should, in my opinion. Why is this important? Two reasons, both of which make your life easier. 1 - coordinator engagement – make it a pleasant, rewarding experience – reduce turnover – increase experience… 2 - In the case of inevitable queries, problems and complaints, you are more likely to hear about them from the coordinator and/or the employee, rather than from an email or letter landing on the desk of your HR Director, or (heaven forbid) chief exec.
- ????? Questions or observations to share? I will be around afterwards for a little while, but hope to be home in time to see who gets booted off The Apprentice tonight! Thanks very much for your attention - I’ll now hand over to Robin, who’s going to cover maturities, National Grid-style.
- Shares in relation to ISA applications sent to Stocktrade on 2/4/08. Final date for ISA applications 3/4/08.
- Choices colour coded for ease of choice throughout documentation
- Choices on allotment include gift and ISA where timing critical.
- Flexibility is the key subject to numbers being received.