Measuring the success of your employee share plan

Establish performance measures for executive plans

Executive plans are often measured on:

Shareholders, investors and proxy advisors closely monitor executive compensation, and it is therefore crucial that boards can demonstrate an executive remuneration package that is well aligned to the interests of shareholders.

If the CEO or other senior leaders receive a large number of share grants, the company must report on this. When the compensation can be tied directly to achievement of goals, it is easier to justify to key stakeholders, making the process more objective rather than subjective.

Determine metrics for broad-based plans

Important metrics for broad-based plans include:

Your company can track the enrolment rates for new employees and renewals for existing employees. Tracking these additional metrics can show you what is working and what can be improved, for example:

• What are the open and action rates for employee share plan communications?
• How many participants attend webinars or in-person events?
• How many employees are logging in to the employee share plan platform?
• How often are they transacting?

In addition to the quantitative metrics, there are also more qualitative measures plan managers should consider. Are employees talking about the plan? Are they excited about it? The ultimate measure of an effective employee share plan is when it empowers employees to feel invested in the success of company.