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Compensation and Benefits Harmonisation: Making Rewards Work in an M&A Integration
25 May 2018
Ralph Wildeman, ASMLJorn Janssens, Willis Towers Watson
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Background information
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Global market leader in Lithography machines for making computer chips (> 80% market share)All of the world’s top chip makers are our customers• Revenue: € 9bn (2017)• Employees: > 21,000• Market Cap: € 70bn
Developer and manufacturer of metrology systems• Revenue: € 150m (highly cyclical)• Employees: 700 (growing fast)• Deal Price: € 2.7bn
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General M&A deal cycle
Business objective
Finding compatible business ventures and partners
HR objectiveAssessing organizational and potential people strengths of targets
Business objective
Ensuring the deal is sound and establishing the value proposition
HR objectiveIdentifying/assessing potential people related risks, deal breakers and integration requirements
Business objective
Defining the blueprint of the merged entities
HR objectiveDefining people vision and roadmaps for successful integration
Business objective
Executing the merger integration plan
HR objective
Executing on HR integration strategy and roadmap and assessing effectiveness
ASML C&B involvement
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Target evaluation
Due diligence
Integration planning Implementation
ASML’s project focus
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Deal objective and implications
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Deal objective: Access to products and intellectual capital complementary to existing ASML solutions Integration in existing ASML products/services
HR objective: Retention, Engagement of intellectual capital and people at the core of the deal HR alignment in line with business
C&B objective: Full C&B Integration onto ASML C&B programs as a priority (1/1/2018) «Equal or better on a TR basis»
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Stakeholder overview Many stakeholders, two critical decision makers…
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Board of Management
Executive integrationcommittee
HR integration team
Global C&B integration team
Regional C&B integration team
HR alignment team
Final decision making body CFO assigned as responsible Board member
Business leaders responsible for overall integration strategy EVP Applications, HMI CEO (Founder), ASML Integration Lead
Ensuring alignment with ASML HR agenda and WoW HR Leadership (project sponsor), incl. HMI Head HR
HR general integration planning and execution HR work stream leads and overall HR integration lead, incl. HMI head HR
Global C&B integration execution and central coordination C&B and HR work stream lead, incl. HMI head HR; WTW
Regional execution and roll-out HMI head HR (US), regional C&B and HR professionals, incl. local WTW
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Integration approach
Comparison of programs and policies across all legal entities, countries
Identify gaps and develop integration suggestions
Map jobs to ASML grading system
Determine a final ASML job grade for all HMI incumbents
Assess C&B integration impact based on job grade and full integration in ASML
Identify delta’s
Determine overall integration approaches based on programs and individual delta’s
Assess final C&B impact and determine individual mitigation approach
Local roll-out and communication
C&B program/policy side by side
Job levelling Initial impact analysis
Integration approach
Final Impact analysis and roll-out
Never assume…
He must be a VP?!
Have we takenthe new programs
into account?Equal
or better!Let me
explain…
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Key learnings
What would you do differently?
What would you advise someone starting off with a similar project?
All stakeholders are important, BUT some are more important than others
Involve the peoplethat can explain the situation
Pick your battles
Approach it step by step, flexible and focused
Have patience and understanding for employees
Do the math:
1+1 ≠ 2
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