RCU, Buckingham House, Glovers Court, Preston, PR1 3LS Tel 01772 885999 | Fax 01772 887336 | gaitken@rcu.co.uk Seminar 5: Linking employee ownership to.

RCU, Buckingham House, Glovers Court, Preston, PR1 3LS

Tel 01772 885999 | Fax 01772 887336 | gaitken@rcu.co.uk

Seminar 5: Linking employee ownership to reward and performance 10.123

Ownership, performance and reward at RCU - what works for us

Gordon Aitken, Director RCU

RCU, Buckingham House, Glovers Court, Preston, PR1 3LS

Tel 01772 885999 | Fax 01772 887336 | gaitken@rcu.co.uk

Seminar 5: Linking employee ownership to reward and performance 10.123

About us – briefly!

Customer surveys; staff surveys; market analysis; data mining; labour market info;stakeholder perceptions; income generation; customer relations management.

Colleges and training companies

Private sector clients

RCU, Buckingham House, Glovers Court, Preston, PR1 3LS

Tel 01772 885999 | Fax 01772 887336 | gaitken@rcu.co.uk

Seminar 5: Linking employee ownership to reward and performance 10.123

Previous Model (2002-April 2009)

• Managing Director

• Deputy Director

• EBT nominee

• 2 Non-Execs

• Right to attend

for all other staff

• Salary bonus (equal for all staff)• EBT group benefits (caravan, events)• Reinvestment

RCU, Buckingham House, Glovers Court, Preston, PR1 3LS

Tel 01772 885999 | Fax 01772 887336 | gaitken@rcu.co.uk

Seminar 5: Linking employee ownership to reward and performance 10.123

Current Model (April 2009 onwards)

• Managing Director

• 3 Exec Directors

(Elected A shareholders)

• 3 NEDs

• Right to attend for all

other staff

• Dividend (equal for all staff)• Staff Benefits Budget (group benefits)• Reinvestment

Share Ownership

•17 voting shares awarded

after 1 year’s service.

• 6745 capital owning shares

(and 900 options) – 60 per

year of service.

RCU, Buckingham House, Glovers Court, Preston, PR1 3LS

Tel 01772 885999 | Fax 01772 887336 | gaitken@rcu.co.uk

Seminar 5: Linking employee ownership to reward and performance 10.123

So what’s changed? This is what colleagues say

Click here (you need to be running slide show)

RCU, Buckingham House, Glovers Court, Preston, PR1 3LS

Tel 01772 885999 | Fax 01772 887336 | gaitken@rcu.co.uk

Seminar 5: Linking employee ownership to reward and performance 10.123

Remuneration Structure

RCU, Buckingham House, Glovers Court, Preston, PR1 3LS

Tel 01772 885999 | Fax 01772 887336 | gaitken@rcu.co.uk

Seminar 5: Linking employee ownership to reward and performance 10.123

Benefits and (Potential) Problems

• Collective enterprise• Motivation/innovation• Cost control• Self-adjusting remun.• Peer group impact• Reduced mgt cost• Recruitment• Transparency• Development spur• Longer perspective

• Initial legal/tax cost• Slower decision-making• Risk of “free riders”• Disenchanted “top

performers”• Small company model –

James Meade (1975)

“employee-shareholder

enterprises” c30?

Benefits Potential Problems

RCU, Buckingham House, Glovers Court, Preston, PR1 3LS

Tel 01772 885999 | Fax 01772 887336 | gaitken@rcu.co.uk

Seminar 5: Linking employee ownership to reward and performance 10.123

Final thought

No structure works without genuine employee involvement

... but most structures will work with it.