In the Company of Owners – The Impact, Challenges, and Benefits of Employee Ownership

Speaker: Professor Joseph Blasi, Rutgers University (USA)

A company of owners creates a corporate culture that fits with high involvement high commitment work teams that are passionate about solving customer's problems. New evidence from a national survey of U.S. workers demonstrates that owner-associates with shared capitalism monitor and cooperate more closely with their co-workers and are willing to make an extra effort to solve problems in the workplace. This talk will address the history of shared capitalism, its benefits, and what a vision of the future might look like as we enter a post-industrial economy of knowledge companies and technologically sophisticated manufacturing firms. We'll discuss the serious risks for shared capitalism of FASB's plans to expense stock options and ESPPs without carving out an exception for broad-based plans through some enlightened policy initiatives. The main result one can expect to see from expensing is the concentration of employee ownership and profit sharing in the hands of top executives and a reduction to other managers, professional, middle class and working class employees. Do we really want a future where capitalism is just shared at the top? Executive rewards can be more reasonable and broad-based rewards can be expanded with the right public policies.

Speaker: Valerie Diamond, Baker & McKenzie (USA)
Speaker: William Dunn, PricewaterhouseCoopers (USA)

One of the most difficult tasks of an international equity compensation professional is monitoring tax and legal changes around the world. This presentation will identify the most significant regulatory developments over the past year and provide suggestions and guidance in how to respond to these changes. Our expert panelists will identify action steps that corporate issuers might take to address these recent changes.

Speaker: John Bagdonas, EquiServe (USA)
Speaker: Louis Rorimer, Jones Day (USA)
Speaker: Tracy Robarge, Ernst & Young (USA)
Speaker: Nanayaa T. Dadson, J.P. Morgan Securities (USA)

As corporate restructuring activities increase, global equity compensation professionals face a renewed set of challenges. This panel will address how significant corporate events such as mergers & acquisitions affect share plan practices both domestically and abroad. In addition, significant share plan modifications such as repricings, option exchange programs, tender of options for cash, and share plan redesigns will be discussed and our panelists representing the administration, legal, and accounting viewpoints will provide guidance and tips to navigate these complex changes.

Speaker: Sylvie Watts, Allen & Overy (UK)
Speaker: Hartmut Krause, Allen & Overy (Germany)
Speaker: Henry Morgenbesser, Allen & Overy (USA)

Learning to work with institutional investors is an increasingly important component of equity compensation professionals. This session examines the influence of institutional investors and their effect on share plan design, operation, and ongoing considerations. Our panelists will focus on legal and plan design considerations vis a vis institutional shareholders in the UK, US, NL, and Germany.

Speaker: Todd Garvelink, McDermott, Will & Emery (USA)
Speaker: Nicholas Greenacre, McDermott, Will & Emery (UK)
Speaker: Art Meyers, Palmer & Dodge (USA)

Attorneys from both side of the Atlantic will describe the current regulatory environment in the United States and its impact on both US and non-US issuers. The session will include an outline and analysis of the recent NYSE and NASDAQ rules on shareholder approval of plans, the requirements of the Sarbanes-Oxley Act which relate to equity incentives.

Communicating to employees around the world remains a great challenge. How do you communicate with target employees of varying education and cultural backgrounds? How do you balance your corporate message with legal constraints in various countries? This session will highlight the lessons Citigroup has garnered in fostering an employee share ownership culture with over 200,000 employees in one hundred countries.

International savings related share plans are increasingly popular - yet confusion remains in how to use them appropriately, what alternatives exist, how to manage them, and how to ensure employees understand them. This session will describe various savings related share plans that allow employees to accumulate wealth while providing option and option-like benefits if share price growth does materialize. Specific plans in the UK (ShareSave), France (PEE), and US (423 ESPP) will be described along with alternative design strategies in countries without formally recognized programs.

"Finding Value." The Australian approach to designing plans and
alignment of interests across shareholders, employees and employers.

• Australian market practice
• The performance link for executive and general employee offers
• Balancing employee and investor expectations
• Australian plans going global
  
  

The recent increased interest and use of share plans in Germany, Switzerland, and Austria by both domestic and foreign companies has spurred significant change in the regulatory, tax, and legal rules affecting these plans. From the Canton driven tax changes in Switzerland to the increased disclosure requirements in Germany, share plans are continuing to evolve in these important European economies. This session will describe recent regulatory changes as well as design trends, including the move from off-the-shelf share plans to customized, targeted performance related plans among German companies as well as the main trends in plan designs used by Swiss multinational companies. The session will also describe some of the complexities faced by multinational companies headquartered in this region in extending their share plans globally.

With recent developments in US compensation now is a good time for American multinationals (MNCs) to review their policies regarding international stock compensation. Given the prospect of stock option expensing and shareholder concerns regarding stock dilution, the reasons for continuing past grant practices may no longer be compelling. This presentation will explain how multinationals might consider using stock options and other LTIs outside the US in a more efficient and appropriate way, yet maintain a coherent global policy.

In four years, the number of option participants at VNU has grown from 200 in 10 countries to 1,300 in 49 countries - largely through acquisitions. VNU’s acquisition strategy resulted in a share plan that was poorly communicated, badly administered, and questionably compliant. This presentation will include discussions of working with management of a de-centralized organization, compliance challenges, reviewing and revising administrative processes, and vendor selection. The session will be helpful for both for practitioners with new or expanding responsibility for global equity plans as well as those who want to understand the fundamentals of expanding share plan environment.

This advanced session will examine the proposed IASB and FASB exposure drafts regarding equity compensation expensing. Our expert panelists will discuss in detail how to manage and address various provisions of the exposure draft including share expense formula alternatives, reporting deadlines and timelines, design strategies minimizing expensing, and key accounting considerations. This discussion will provide ample opportunity for delegate questions and answers on these very recent developments.

The current corporate governance pressures, accounting rule changes, and economic trends are providing an opportunity for all organizations to revisit and redesign their equity compensation plans. This session will explore what isn't being reported in headlines: How are companies reducing run rate and overhang? Are grant sizes and eligibility really being reduced? Are full value grants such as restricted stock really replacing options? Co-presenters from the US and Canada will reference a new worldwide database of equity compensation levels and practices previously unavailable.

Whether you are a seasoned veteran or just starting in the share plan profession, it is essential to develop a thorough understanding of the complex rules and regulations governing equity compensation programs. In fact, as the roles and responsibilities of share plan practitioners increase to include corporate governance monitoring, accounting and financial reporting needs, and liasioning with outside investors, the scope of our work seems to simply expand. This panel will explore what resources equity compensation practitioners can use to expand their professional skills and continuing education. We will explore the current offerings in the US (Santa Clara University - CEPI), Ireland (National College of Ireland), and the UK (Institute of Chartered Secretaries and Administrators) as well as discuss what new education areas share scheme professionals should focus on in the years to come.

Fraud happens! Just don't let it happen to you. As corporate scandals spurned new rules and requirements to protect investors and employees from internal fraud and financial mis-use, equity compensation professionals have been increasingly asked to take on internal policing functions. This session will help equity compensation professionals develop guidelines to understand the various forms of fraud being prosecuted in courts around the world, analyze your company's exposure to these risks, and provide recommendations for protecting your company against fraud. Additionally, this session will focus on recent enforcement actions taken by various authorities worldwide.

Multinational companies with complex plans, diverse needs, and complicated administrative and reporting challenges will find the Nortel lessons pertinent and helpful. In this session, Nortel representatives will describe their plan design, administrative challenges, and highlight 'What they would do if they could do it all again.' Nortel's experience is useful for any company considering wide-spread employee ownership in a diversified company. Particular focus will be paid to Nortel's high public exposure and investor and public reaction to their share plan proposals.

The HR and tax implications to employers of equity compensation in the event of involuntary employee terminations.

Introduction – Equity compensation is seen as an attractive and progressive feature of the total compensation package for many organizations. It is commonly viewed as a key tool to assist in employee retention. In this session however we will discuss other scenarios. What happens when retention is no longer desired – say in the event of a group lay off?  In such a situation the equity compensation can prove to be counter productive and a real stumbling block - a very tough challenge therefore for both the HR and Tax professionals involved. In Europe this situation can be even more complex and challenging than in North America.

Session format – An interactive session that, in a case study scenario format, will give you an overview of some of the key HR/Tax issues to be faced in employment termination situations in France, Germany, the Netherlands and UK. Questions like “What can be done up front to help avoid potentially contentious situations arising in the event of employment termination?” will be answered and then will be followed by a group discussion.

Distributing grant paperwork to international employees can be a challenge. In addition to cultural hurdles, legal requirements may necessitate using customized grant agreements, translating documents into local languages, or enforcing specific acceptance requirements. Learn about the various considerations involved in distributing share plan documentation to international populations and how two companies, Oracle and QUALCOMM, have addressed these issues and streamlined the distribution process through online document delivery.

This session is aimed at companies and advisers based outside the UK, who already know the basics of UK tax and other aspects but need an update. In particular this session will deal with the extensive changes introduced in the Finance Act 2003 affecting both approved and unapproved plans. It will deal with the latest position on national insurance contributions and pay as you earn obligations of companies, the new rules on corporate tax deductions in the context of share plans and the position of internationally mobile employees. Whilst this session will have a tax focus, we will also touch on the major non- tax aspects affecting non- UK companies extending their plans into the UK.

The first part of this presentation will introduce and explain the issues and challenges faced in implementing share plans in a financial environment.  Prudential Plc is committed to connecting people to the business through equity participation.  To highlight this an outline of the various Share Plans in place will be discussed along with the challenges faced during their implementation process with a focus on best practices, pitfalls to avoid and new plans for the future.  The second element will concentrate on servicing Share Plans and analyses plan sponsor and employee research and details subsequent conclusions.  In addition, the session will review the current research on service issues relating to outsourced plan administration. The session will cover plan sponsor opinions on service issues as well as employee opinions.

This session focuses on what the Coca Cola Company has done since it became the first company to change to FASB  123.  We will discuss the events within Coca Cola as they relate to the equity plans both domestically and globally and what decision considerations were explored.  The session will share what this Company chose to change and why.  We will provide key points for those companies who will be shifting their accounting with the new exposure draft and IASB directive .  Any company who is interested in changing its plan designs will be interested in attending this session.

A panel of legal experts, including practicing attorneys from Spain, France and the United States, will provide an overview of how share plans are used in Spain, France, Italy and the Netherlands and the core legal considerations for extending and operating plans in those countries. The discussion also will cover the most recently enacted legislation in Spain, France, Italy and the Netherlands and current issues impacting employers with share plans in those jurisdictions. Legal updates may include securities law developments, tax law changes, employee rights expansion and/or data privacy developments.

The ongoing development of corporate governance guidelines continues to present challenges and questions for the equity compensation professional. What modifications should you make to plan operation, design, and oversight? Are there best practices to model your plan around? What procedures are appropriate to ensure compliance of the many developments around the world. This session will discuss and debate the ongoing corporate governance challenges faced by all equity compensation professionals.

Global regulatory and compliance issues are everyone’s concern. Understanding how to leverage the resources of an external advisor and your outsource provider will help ease the pain and anxiety associated with these complex challenges. During this workshop, Fidelity Stock Plan Services and Ernst & Young will discuss the roles that your outsourcing service provider and your advisor should play to support you in the ongoing management and compliance of your organization’s global stock plan.

Data privacy has remained one of the more difficult, confusing components of share plan operation. Specifically, rules and regulations in Europe have shaped how parent and subsidiary operations share equity compensation plan information. The US Patriot Act may also impact transferring sensitive information across borders. This session will explore recent developments, legislative requirements, and operational considerations necessary to satisfy authorities around the world.

Defining and understanding your multinational administration needs is the most significant operational challenge facing global equity programs. Balancing the need for real time information, streamlined and centralized reporting, accurate withholding and tax obligations, and local administration/communication can be a difficult task. This session will explore how Philips Electronics determined its outsourcing needs and challenges in moving to a completely online service for employees and the issues faced in developing employee data and back end processes to support 63 countries and 100+ payrolls.

The EU Prospectus Directive promises to be simultaneously a great challenge and benefit to corporate issuers operating share plans in Europe. This session will explore the available exemptions and current position on implementation - including updates on recent developments within the EU and other relevant bodies. In addition, our panelists will explore the practical implications for US, Canadian, and other non-EU companies as well as the legal implications and issues regarding filling a formal prospectus.

This session will focus on our host country's share plan environment. Specific attention will be paid to understanding the types of equity generally offered to Canadian employees, tax and legal requirements of the various provinces, and regulatory requirements of non-Canadian companies operating share plans. Attention will be paid on the cross border considerations that are similar to (and influenced by) the US.

With the planned EU expansion of additional countries in 2004 (and beyond) the complexity, form, and operational considerations of share plans in Europe will continue to evolve. This session is targeted to companies operating, or planning on extending, their share plans in the new EU countries. Specific focus will be on Hungary, Poland, Czech Republic, and Lithuania - although general equity compensation considerations will be described for all ten new EU countries.

Scottish Power (SP) is an international energy business that offers all-employee and discretionary executive stock plans and has undergone several major corporate actions and restructures in recent years, including the mergers, demergers, and selling off significant corporate functions. These corporate actions have had a major effect upon employees holding stock and options, making effective communication an essential part of ensuring the plans remain attractive and appreciated by the workforce. This case study looks at the impact of those corporate actions and the challenges in communicating with employee stockholders.

An Olympic Effort - Building an Effective Cross Functional Team; Multi-Party Solutions for Global Share Plans

Speaker: Michael Byron, Abacus Global (South Africa)
Speaker: Janet Cooper, Linklaters (UK)
Speaker: Andy Turner, Abacus Global (Jersey)

Building an internal and external share plan team is one of the greatest challenges in developing a share plan. The prospect of identifying advisors on tax and legal, regulatory, plan design, implementation, operation, and communication issues can be overwhelming. This presentation will focus on developing an appropriate team, encouraging teamwork, and building effective communication among a multi-party internal and external share plan partnership. The focus will be on both internal and corporate contacts (lawyers, accountants, administrators, etc.) involved in developing a share plan and the entire session will be structured around an custom video highlighting the importance and structure of 'champion' teams.

Challenges of Global Corporate Governance - Convergence and Divergence

Corporate governance is a critical element for all multinational companies today. This panel will provide an update on the new and proposed legislation in various countries and how participants must change their way of 'doing business.'

This plenary sessions provides conference attendees with an opportunity to listen to a conversation between three senior HR/remuneration directors from three different industry sectors and locations as they discuss their reaction to the changes in the business environment. Learn how Alcatel (France), Hewlett Packard (US), and Australia National Bank (Australia) have made share plan changes in response to internal and external pressures.