Wray & Nephew extends share ownership to workers
LIQUOR giant J Wray & Nephew Ltd has raised its collective glass to its employees by allowing them to spend up to five per cent of their net salary to buy shares in parent company Campari Group.
The move was fuelled by an internal survey that tasted the views of employees which showed that there was concern that the ‘regular man’ was not enjoying the sweets of the profit made by Italy-based Campari.
J Wray & Nephew’s director of human resources Jacqueline Cuthbert told the Jamaica Observer that the scheme, which was launched last October and took effect on January 1, had been off to a spirited start.
She also gave a background into the genesis and current state of the project that embraces around 600 employees.
“The backdrop to doing this was that we have a bi-annual employee engagement survey and one of the pain points was the perception among 60 per cent of our employees that they did not feel they had a share of the profits of the organisation, or share in the company’s success. That was one of the main drivers for the Campari Share Plan, which is a Employee Shares Option Plan (ESOP).
“When we did deep dive into that response from the survey, the primary concern was yes, it’s great that we receive bonus on an annual basis but we would like to have a bigger stake in the company. The feedback was across the company. We took it seriously. We know we had a population that was keen to invest in the company, or invest in the vehicle that’s attached to the company,” she stated.
The Campari Group has also extended the share offer to its employees in 20 locations worldwide, with a 51.6 per cent take-up.
Cuthbert said that, evidenced by the fact that 70 per cent of the J Wray & Nephew population had topped up their pension arrangements to the maximum level allowed by the company, the launch of the ESOP “is clearly saying that the success of the company is not the domain of top leadership. It is attributable to all the employees, and given that J Wray & Nephew is the fourth largest operating company in the Campari Group, our contribution is significant, and employees know that,” Cuthbert went on.
“I interpret the high take-up
as confidence in the leadership’s capability to deliver on the results and recognise that collectively, we have an impact on the outcome. That’s key,” she added.
The project was preceded by strong education, focused on employees, since last October, and salary deductions will began with the January payroll.
Under the arrangements, employees have the opportunity to take up the maximum shares that their five per cent of salaries ceiling would allow. Certain amounts are deducted from their salaries and wages monthly, and at the end of a three-year vesting period, participating employees will receive “a free award of matching shares based on a matching ratio”, the company had said earlier. Those who opted for under five per cent of salary to shares have the opportunity to increase or decrease their contribution or step out at one point each year.
“For the first year, 50 per cent of our employees signed up. Half of those opted for the maximum contribution, being five per cent of their salary, which was an amazing result, because typically, when you launch these sorts of schemes in the first year, usually there is a low takeup, and that is usually in a market that is more mature, like the US, so that is a remarkable result for us.
“We have a population where 70 per cent of our employees choose to top up their pension, beyond what’s required, and here we are seeing, with the ESOP, is that at least half say ‘yes’ we want to join now, and half of those went for the maximum five per cent. That’s amazing.
“Once people start to see that this is good, and there is a share price movement, it has a knock-on effect. So next year I would anticipate more people will join the scheme.
She added: “You can do anything you like with your shares, but we encourage employees with the saying: ‘the longer the shares stay in the pot, the more potential they have for growth, so look at it as a savings which either can support your pension, or schooling costs for your children or a substantial purchase, as opposed to a kind of quick access fund… look at it as a long-term investment, rather than quick cash’.
“One of the observations that I have made as a Jamaican descendant is a lack of trust in institutions… putting your money in them. It’s very good for me to see that that suspicion is not linked to the company that they work for. They are obviously comfortable in putting significant amounts of disposable income into the future, the company which is going to yield significant results for them in the long term. This is going to be a major tool for us to attract the best,” Cuthbert said.
She stated that the company “addressed inequities on a number of levels. Before, it was top management who benefitted, now it’s everyone. All employees have pension plan and health plan now. You don’t sign up your disposable income to an investment model that you don’t trust...” she emphasised.
In order to become eligible, employees will have to be part of the company for a minimum six months.
According to Cuthbert, the trade unions which represent a large percentage of workers – the University and Allied Workers Union, and the National Workers Union, as well as the Sugar Producers’ Federation – have all given the move their blessing, with 40 per cent of the employees that they bargain for taking up the offer.
“It’s big news at Wray & Nephew and in the Campari Group,” she said of one of the few companies in Jamaica in which the scheme is applied to all employees, and not just at the senior executive level.
“Our belief is that success comes from individual and collective contributions. This is also a reflection of that. You have an opportunity to invest in the company that you work for. That’s unique. It’s actually making employees as important as leadership,” Cuthbert maintained.
According to Campari Group, in a news release issued from its Milan offices last month, “the strong response of Campari Group’s employees, deliberately contributing part of their salaries to ESOP, confirms their trust and long-term commitment to the company’s future growth
“The first of its kind since the company’s listing on the Italian stock market 20 years ago, the ESOP is yet another testimony of Campari Group’s ever stronger and long-lasting commitment towards its people in line with the long-term perspective which has always characterised its strategic vision.”
Campari Group’s CEO Bob Kunze-concewitz stated in the release that “The extraordinary response of Camparistas to our very first employee stock ownership plan in its launch year is a great achievement for us. Despite the uncertain times, Camparistas share the group’s long-term vision and, with their active participation, confirm their passion to strive together for the growth and continuous success of our business.”