Brambles Global Employee Share Plan

Phil TurssGroup Vice PresidentRemuneration & Benefits

Employee Ownership Group

10 May 2012

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Agenda

• Brambles overview

• Commitment to share ownership

• Brambles global employee share plan – MyShare

• Plan design – Global std vs. local customisation

• MyShare – Key strengths and key challenges

• Global employee share plan costs

• MyShare participation

• Where to over the next 3 years?

• Key learnings

• Does employee share ownership drive employee engagement?

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Brambles overview

• Brambles is named after Walter E. Bramble who established W E Brambles & Sons in 1890 as a carrier service between Sydney and Newcastle

• Listed in Australia with Sydney HQ, and major Regional head offices in Orlando and Atlanta, USA and London, UK

• Business size:

– 17,000 employees worldwide

– Operates in 54 countries covering Americas, EMEA and Asia Pacific

– Sales last financial year were US$4.7B

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Brambles overview (cont’d)

 

– CHEP is a global leader in the provision of equipment pooling services, managing approximately 300 million pallets and containers on behalf of its customers to help them transport products safely and efficiently.

– Recall manages the secure storage, retrieval and destruction of physical and digital information for approximately 80,000 customers worldwide.

– IFCO operates a pool of approximately 116 million reusable plastic containers worldwide and, in the USA, sorts repairs and reissues almost 200 million pallets a year through its national pallet management network.

Brambles three main businesses are:   

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Our commitment to employee share ownership

• Brambles has a long history with employee share plans

• In 2008 we developed a new global remuneration strategy

• Employee share ownership is a key part of that strategy

• Board Remuneration Committee and senior management commitment

• Major shareholder support

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Brambles global employee share plan - MyShare

• Introduced in late 2008

• Key principles:

– All employees can participate (Blue collar worker through to CEO)

– Same plan worldwide

– Post tax annual purchase of between AU$100 and AU$5,000

– One-for-one matching of shares purchased and held for 2 years

– Rewards employee investment in the company

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Plan design- Global std vs. local customisation• A key principle of MyShare is “one plan worldwide”

• Pros:

– Same treatment for all

– One set of plan rules approved by shareholders

– Supports global mobility

– Avoids constant “gaming” to seek out tax minimisation loopholes

– Substantially reduces the cost of the plan

• Cons:

– May not maximise individual country tax rules

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MyShare – Key Strengths

• Encourages share ownership from our employees

• Affordable to employees (Low annual min)

• Gives a global identity for employees as part of the Brambles Group

• Strong EVP – worldwide benefit with a single plan for all

• Assists employee retention

“MyShare participants as a group are now our 20th largest shareholder”

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MyShare – Key Challenges

• Offered in 45 countries supported by 84 payrolls

• Different languages

• Differing tax regimes

• Share ownership not a way of life in some countries

• High levels of participation in a small number of countries

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Global employee share plan costs

• Delivering a global employee share plan is expensive

– Legal & Tax Due Diligence costs

– Expatriate tax issues

– Communications

– External & internal administration costs

– Cost of providing the Shares

• If you want to deliver the goods, you need to pay the freight

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MyShare – Participation rate to date

Participation over 40%

Participation between 11 - 39%

Participation of 10% or less

MyShare – Where to in next 3 years?

We believe we can achieve 40-50% participation overall:

• To date most communication has been electronic via webinars

• Enhanced communication via a “road show” to major countries

• Shareholder approval to occasionally increase the level of matching

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MyShare – Key learnings

• Set your principles from the outset

– Principles will drive the strategy

• Good relationship with the external administrator is essential

– It is too complex to administer without good systems and processes

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MyShare – Key learnings (cont’d)

• Strict ground rules are important in reducing admin costs

• Don’t be guided by anecdotal complaints or requests based on individuals

• Don’t leave it to a single source of communications

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Does employee share ownership drive engagement?• Any evidence?

• In isolation, it is not a panacea for delivering higher levels of engagement

• To be effective, employee ownership needs to become an on-going feature of the company's remuneration and employee engagement strategy

• Major commitment from the Board and management is a key to its success

Questions & Answers