Link Group spoke with Stephen Kennedy, Company Secretary at Technology One Limited.
Tell us a little about Technology One Limited and your role
Technology One Limited (TechnologyOne) is Australia’s largest enterprise software company and one of Australia’s top 100 ASX-listed companies, with locations globally. We provide a global SaaS ERP solution that transforms business and makes life simple for our customers. Our deeply integrated enterprise SaaS solution is available on any device, anywhere and anytime and is incredibly easy to use. Over 1,300 leading corporations, government agencies, local councils and universities are powered by our software. My role at TechnologyOne encompasses many elements, one of those being management of our share register and employee share plans.
What plans are employees able to participate in?
Equity plans form an invaluable part of Technology One’s recruitment, retention and reward strategy, we offer gift share plans to top performers, long-term incentive plans to select team members, and recently introduced our first matched plan for eligible team members to opt into. Our initial offering received a massive 40% take up, and we’re excited to release our next matched plan offer for the FY24 plan year.
Why did you offer the matched plan?
We recognise that people are our power, which is why we wanted our team members to have a stake in TechnologyOne’s success as their hard work keeps us growing and moving into the future. The notion of an “all staff” employee share plan was driven from the ground up – a concept originating from team members at a Hack Day – our bi-annual event where team members down tools and put their creativity and innovation to the test, brainstorming and creating ways to better company operations or customer offerings. In recognising the longer-term horizon, and benefits for attraction, retention, and motivation, TechnologyOne responded to this by not only offering an all staff plan, but including a matching component as an additional incentive.
What are the key features of the matched plan?
The key to the matched plan is its simplicity and uniformity across all jurisdictions. Eligible team members can elect a share purchase contribution amount within AUD $500 to $25,000 (foreign currency equivalent) which is facilitated by payroll post-tax salary deductions in equally apportioned amounts over the plan year. Monthly contributions are used for participant share purchases, where for each two shares acquired one matched share right is granted. There are no acquired share disposal restrictions (other than Trading Window restraints) and the matched share right conversion conditions are limited to remaining an employee of the TechnologyOne Group at the matched shares vesting date.
How do employees value the matched plan?
The plan is gaining popularity as more team members understand the benefits and it’s being promoted from within. We’re seeing increased employee appetite to understand our share price movements, company results and other factors contributing to share price growth. Anecdotal feedback is that employees genuinely value the investment the company has made in them – through the matched share component, TechnologyOne covered brokerage fees for share purchases and an easy avenue to participate – and it’s provided opportunity for some team members who may never had owned shares before to get their foot in the door as an employee owner. We’re yet to run the analytics on how the plan has impacted retention, team member performance and culture.
How do you engage with employees throughout the offer period – what is involved?
For the rollout of our inaugural matched plan, we spent considerable effort engaging with employees to promote the offer and to educate team members on the offer terms and share ownership. Our engagement strategy included email, intranet and executive leader promotion, facilitating webinar sessions on the plan's key features and workings, general tax treatments and the basics of owning shares, including share price, dividends and trading windows – we’re looking to roll out a similar strategy for our FY24 matched plan offer and found that the interactive webinars where team members can ask questions directly usually has the best result in assisting them to understand the offers in detail.
What would you do differently to engage employees effectively?
As we mature our approach, we’ll be looking to roll out “training” for key roles across the business where it’s beneficial that they have a sound knowledge of the plan workings – for example working with our recruitment team and select leaders across the business. We’ll also look to understand which engagement strategy is best adopted for our differing operating countries to tweak as required, rather than rolling out a “one size fits all” approach. Group sessions utilising webinars and in-person presentations don’t suit all staff and some prefer to have the ability for a one-on-one discussion.
What were the key challenges in implementing the new plans?
We have team members in Australia, New Zealand, the United Kingdom, and Malaysia. A key challenge was navigating the differing corporation and tax requirements to develop one set of offer terms and a standardised approach – this took a bit of behind the scenes work utilising outsourced counsel to ensure that all bases were covered and to be kept up to date with local legislative changes.
What feedback have you received from employees since the launch of the plan?
Feedback has been fantastic, it’s a well-received initiative where I think we’ll achieve year on year increase in participation.