Kindred Group recognises that there is a huge advantage to be gained for both the company and its employees if we can give employees a real stake in the company through share ownership. We provide employees the opportunity to share in the success of the company and really align employees with both, Kindred’s performance and the interests of our shareholders.
Shares instead of cash
We have had a Performance Share Plan for a limited number of senior employees in place since 2013 and we first extended the opportunity for all employees to benefit from share ownership in 2015 when employees were voluntarily given the opportunity to substitute a fixed cash bonus for Kindred shares (SDR’s). This initial move saw over 50% of employees deciding to take shares instead of cash which subsequently turned out to be a good choice for them as, when the shares vested, they were worth much more than the original value of the cash bonus.
This exercise demonstrated to us that the concept of all-employee share ownership was a good one and we took the decision to formally launch our All Employee Share Scheme (AESP) in 2017 to coincide with the launch of our new strategic cycle. This scheme provided all permanent employees with a number of shares that would vest at the end of 2020 subject to us achieving our EBITDA targets. We also made pro-rata awards to all new employees each month so that everybody had the same opportunity to benefit. The share price upon award was 85 SEK and, upon vesting, the share price was 145 SEK representing a 70% increase in value for employees. We’re very hopeful that many employees will decide to retain their shares and maintain a long term investment in Kindred but of course, they are also free to sell them as well should they wish to do so. We partner with an online share scheme administrator who supports us with the process and makes the administration process much easier for employees.
Launching a new All Employee Share Plan
Building on the success of this, Kindred has recently launched a new AESP which is similar to the old plan but will run over a shorter performance period, namely 2 years as opposed to 4 years. The scheme will be available to all permanent current and future permanent employees (with exception of those on Kindred’s Executive Management team). We have also committed to making a new award every year for the next 3 years. These changes were made to help engage and motivate our employees but also to make the scheme both retentive and rewarding for them.
A unique and special benefit
We’re aware that other competitors have introduced employee save as you earn type share schemes, which provide the opportunity for employees to purchase discounted shares. We genuinely believe that our AESP is a unique and special benefit that aligns employees with Kindred’s performance, provides them with an opportunity to be shareholders in the company and really differentiates our employee proposition from that of our competitors.