Stocking up on shares
Every large company and every large venture is faced with the same problem: how do you make each and every person involved care about its success? How do you make them feel that a profit for the company is a profit for them? For us, the answer was simple: encourage all our people to become shareholders in the company.
Many businesses offer share options as part of their pay packages, but it’s not always that simple. It’s too easy to leave behind those who work in faraway places, or to ignore the bureaucracy and red tape that would put off some employees who have never owned shares before. And that’s before you take into account the fall in the number of small brokerages prepared to deal with small investments since the credit crunch of 2008.
So Diageo has been overhauling its whole Sharesave scheme to make it easier for everybody to join. The first step was to consult with advisors Clifford Chance and Deloitte on the differing share-ownership and tax laws that apply in different countries. We found that on occasion we had been offering deals that would work in the UK and US but that simply weren’t viable in some other countries.
Given that Diageo is particularly keen to expand into growth markets like China, this was an important problem that needed to be set right. The new schemes were rolled out in 27 countries in 2010 and a further three in 2011. Restrictions on participation were relaxed and accounting made simpler and more flexible.