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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)
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Key Impacts on Employee Share Ownership
Securities and Corporations Law
Foreign Exchange requirements
Tax legislation
Market sentiment
Executive remuneration structures
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The Regulatory Landscape
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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
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Number of Plans in Operation
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Participant Numbers By Country
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Percentage of the Labour Force that Participate
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The UK Landscape
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UK Participation Numbers Per Plan
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UK Trends in Plan Types
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The US Landscape
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US Current Trends
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
IncentiveStock Options
Non-qualifyingOptions
StockAppreciation
Rights
RestrictedStock
RestrictedStock Units
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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%
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US ESPP Trends
0%
10%
20%
30%
40%
50%
60%
70%
80%
3% or lesscontributed
3 - 5 % 5 - 8% Over 8%
Employee
Manager
Executive
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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%
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The Australia Landscape
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Australia – The Number of Plans that Companies Operate
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34+
2009
2010
2011
0%
10%
20%
30%
40%
50%
60%
2009
2010
2011
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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
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Executive Plan Types - Australia
RightsOptions
SharesOther
2009
2010
2011
0%
10%
20%
30%
40%
50%
60%
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Conclusions
The biggest impacts: Employee taxation Executive remuneration sentiment Market sentiment, costs for a company
Securities law can be the killer
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Discussion