The Power of One: Exploring the Benefits and Drawbacks of Centralised Share Plan Data

SPEAKERS

June Davenport, Executive Director, Corporate Services, Solium (UK)June Davenport, Executive Director, Corporate Services, Solium (UK)

Warren Nash, Global Share Plan Manager, SABMiller (UK)

Outline• About us• Share plan data then and now• What is the power of one?What is the power of one?• Organisational groups and relationships to share plan data• Architectural decisions and considerations

Potential benefits and drawbacks of the data hub• Potential benefits and drawbacks of the data hub• Part of broader trends• Assessing return on investment• Review

About usAbout usSolium• Founded in 1999

SABMiller• One of the world’s leadingFounded in 1999

• Solium Shareworks Premier• Operations in UK, US,

Canada Australia

One of the world s leading brewers• 200+ beers• Major bottler of Coca-ColaCanada, Australia

• 3,200 clients in 150+ countries; 1 million+ participantsPl i it b th

j

• Operations on six continents• 70,000 employees in 75+

countries• Please visit our booth countries• Range of equity incentives

Share plan data then…

• Before expensing (aka the Cretaceous period)• Share plans were simple and often managed by

HR• For data management spread sheets and simpleFor data management, spread sheets and simple

databases were sufficient

‘You could manage a share plan with‘You could manage a share plan with WordPerfect and some Typex.’

The fallout

• The share plan climate changed• Different regulatory landscape• Different regulatory landscape• Strange new plan types developed• Service providers needed to evolve to surviveService providers needed to evolve to survive

Today• Share plans are highly regulated and growing more so all

the time• FATCA and the gang, RTI, global tax expensing

• Data integrity is at the core of compliance and risk mitigationmitigation• in-teg-rity: the state of being whole, entire, or undiminished;• in-teg-rity: security

A d th t t k t th f• And that takes us to the power of one

So, what is the power of one?

• Is it a data source issue?• Is it a data storage issue?• Is it a data storage issue?• Is it a single vs. multi vendor issue?

• Quick answer No. But let’s look at these more closely.

Who cares about what?

Legal & compliance• Securities and

HR & benefits• Demographic info• Securities and

regulatory reporting• Board and executive

• Demographic info• Remuneration info• Communication

• Local laws Communication

• Education• Employee portal• Mobility tracking

Who cares about what?

Finance• Expensing under ASC

Payroll• Tax withholding and • Expensing under ASC

718 and IFRS 2• Financial reporting

• Tax withholding and remittance

• Monitoring limits p g• Recharge

g• Reporting

How do they store it? Internal groups: Legal, HR, payroll and financeIndependent silos Shared silo

How do they store it?

FinanceLegal HR Payroll

Global taxation and mobility, real-time info,FATCA, etc.

Data sourcing and storage• Not a source issue - always multiple sources of share

plan data• Not a storage issue• Not a storage issue

• Goal is to eliminate redundant data stores • It’s not about how you store information, but

how you’re enabling it to flow

Is it a vendor issue?• Sometimes

Record keeperRecord keeperParticipant portalCorporate reportingGl b l t ti d bilit

Do they enable automated dataGlobal taxation and mobility

BrokerRegistrar (transfer agent)

automated data flow among each other? Is that flow transparent?

Trust/custodian

Is it a vendor issue?• Not necessarily

• You need connections between those vendorsbetween those vendors

• Eliminate roadblocks• Let traffic flow

A single versionA single version of the truthof the truth

The hub. What is it?• A centre around which other things revolve or from

which they radiate; a focus of activity, authority, transportationtransportation• Subway station, airport or even a roundabout (traffic circle)

• Does a transportation hub store people? • No. It’s an intersection.

• Does it require different systems to work together?• Absolutely Air subway rail bus car People with different needs• Absolutely. Air, subway, rail, bus, car. People with different needs.

The share plan hub

P l E itPeople Equity

GovernanceParticipants

Share plan lifecycle HRLegal

People & plans

FinanceAudit & compliance

Legal

HRLegalC li

GrantTax Compliance

Data Hub

ExpenseCorporate

Trans-actions

HRPayrollHR p

tax

Vest

actions ay oFinance

HRPayroll

HRPayroll

Are you ready for ‘the hub’?

• Is it necessary? Is there a demand? Needs assessment• Anticipate future needs• Anticipate future needs

• Do you have a centralised HRIS or are planning for it?• Facilitates but not essential

• Do you have cross stakeholder engagement?

f fThe key is to set yourself up for success

CauseCause and effectand effect

Effects

• Stakeholder empowerment P ti i t i• Participant experience

• Effective delivery of strategic objectives

Causes• Data integrity

• Security• Utility• Utility

• Visibility and flexibility• Reporting enginep g g

Potential drawbacks

• Challenge of change• Turf warsTurf wars• Ownership and control?• Cultural buy-iny

• Stakeholder expectations

Broader trends• Tax compliance and remuneration• Shareholder activism • Governance and compliance• Corporate tax• Tax men internationally

• ‘I want it now’ (US, UK)• ‘I want it yesterday’ (South Africa)I want it yesterday (South Africa)

Return on investment• Are you getting the most out of your share incentives?

• Financial bottom line?

• Do you provide enough information to participants?• Do you provide enough information to participants?• Are they self sufficient?

• Are you making better use of time?y g• Are you sleeping better?

The lawThe law of unintended consequences

Any questions?

June Davenport Executive Director, Corporate ServicesExecutive Director, Corporate ServicesSolium (UK)june@solium.com