As a business originally founded by two brothers, both engineers, it is no surprise that family and problem-solving both really matter to the Weir Group.
We have now brought both elements together by creating a share ownership scheme that will give all our 15,000 employees the chance to become owners of the business, just as James and George Weir were back in 1871.
This may sound romantic, but the commercial importance is real and the practical complications are significant.
The scheme – Weir ShareBuilder – is one of the most thorough. And it has to be. We operate in more than 50 countries, have manufacturing facilities in six continents, and our service centre network covers every major mining and shale energy basin in the world.
The plan amounts to an award of £300 in 2019 and the same again in 2020 to those employees with at least a year’s service. These are ordinary shares that rank alongside our existing ones in all respects – including votes and dividends. Recipients are free to hold them, add to them by buying more in the market or to sell them. From 2021 onwards we will continue to give the free award to all new staff and will also introduce a matched share plan for all employees.
This is not, however, about financial reward. This is about ownership, giving our employees a direct stake in the future success of the business and perpetuating the family culture that we hold dear. We hope they will vote their shares and exercise their right to ask questions of management at the annual general meeting, at the regular one or the special employee one we will hold to cater for more internal questions.
Simple as the plan may sound, putting it in place was anything but as we wanted to grant share awards in our locations as opposed to taking the decision of awarding cash in those countries with complex regulatory requirements. Weir had a small internal team working on the project, supported by a firm of specialist lawyers at Tapestry Compliance and communications specialists Stitch.
From initial design to launch took almost 18 months and this will need to be refreshed to ensure we remain compliant with all the rules as each tranche vests and as the share matching scheme gets underway.
Some jurisdictions were relatively straightforward – Hungary, for example. Others, like China or South Africa, were more complex. And in many cases it wasn’t just securities regulators that required engagement but exchange control authorities as well.
There are also tax implications in each jurisdiction, which it is important to understand both from the perspective of the company and of our employees. Every country has slightly different rules but, for individuals who incur a tax liability they don’t want to meet themselves, we have put in place a mechanism that allows Weir to deliver them net shares or net cash after selling the necessary stock.
A new share plan and what it means to be a shareholder needs to be explained. A communications toolkit in 20 different languages was created. This is being rolled out with the help of 75 employee engagement champions and we have established a dedicated microsite and helpline.
Why go to all this trouble you may wonder? The answer is simple: our colleagues are our business and without them we are nothing. We want them not only to feel ownership of Weir but to have ownership. If they do a good job they should share in the rewards. If they are shareholders they are more likely to feel incentivised to play their part in growing the business.
Our shareholders agree. The scheme will cost us about £10 million over the next two years and some more beyond. But 99% voted in favour of it.
We feel strongly that it is no longer enough to pay lip service to employee engagement: all our stakeholders expect concrete action from companies.
Weir ShareBuilder is part of a wider programme of inclusion that also includes gender pay parity, 50:50 male/female shortlists for external appointments and board-level responsibility for employee engagement via one of our non-executive directors.
We are under no illusion that there is more we can and must do to be an undisputedly inclusive business. But we believe that by enabling all our employees to be aligned with the success of the business we will be doing right by them, right by our shareholders and right by our founders.
Rosemary McGinness is chief people officer at The Weir Group