GEO INSIGHTS

Daniel Křetínský, known as the Czech Sphinx, is poised to become the first private owner of Royal Mail in its 500-year history, after the board of International Distribution Services (IDS) agreed to his £3.57bn takeover bid. Despite Royal Mail's financial struggles, Křetínský believes he can modernize and restore profitability to the company, aiming to make it one of Europe's largest logistics firms. The deal, which must still be approved by IDS shareholders and potentially scrutinized under the National Security and Investment Act, includes a series of five-year commitments to maintain Royal Mail's universal service, branding, and union recognition.

Major banks are increasingly compensating employees with company stock to boost motivation and align their interests with corporate value. Mitsubishi UFJ Financial Group and Sumitomo Mitsui Banking Corp. will implement systems where employees receive shares based on performance evaluations and points awarded, with Mitsubishi UFJ offering shares after a three-year period and Sumitomo Mitsui providing them at retirement. These systems aim to encourage long-term growth and leadership, potentially influencing compensation practices at other banks.

The gender disparity in access to company share schemes has significantly increased, with men now four times more likely than women to participate, according to analysis by Vestd. This disparity is attributed to the existing gender pay gap, where higher earners, predominantly men, are more likely to be included in executive share incentive plans, and women, earning less on average, face challenges in saving and purchasing shares. HR experts suggest implementing initiatives to support women advancing to higher-paying roles, promoting equity in compensation programs, and educating employees about the benefits of share schemes to address this inequality.

Generali has announced a share buyback program as part of its Long Term Incentive Plan 2023-2025, approved by shareholders on April 28, 2023, targeting a maximum of 11.3 million shares. The buyback, managed by Citigroup Global Markets Europe AG, will start on May 22, 2024, and conclude by August 2024, with a maximum total value of €300 million. Generali currently holds 17,059,872 treasury shares, and will conduct the buyback exclusively on the Euronext Milan market, adhering to regulations to ensure equal treatment of shareholders.

Lawyers at McCann FitzGerald recommend employers reconsider offering a Revenue-approved Save As You Earn (SAYE) scheme due to its risk-free, tax-efficient savings and share purchase options for employees, which can enhance engagement and retention. Despite the decline in SAYE savings carriers in Ireland post-Brexit, a new licensed provider is expected to be announced soon. SAYE schemes allow employees to save between €12 and €500 monthly for three to seven years, with the option to buy company shares at a discounted rate, and if they choose not to buy, their savings are returned tax-free.

Revolut plans to allow employees to cash in shares worth US$500 million, with Morgan Stanley likely coordinating the process later in 2024. This transaction, aimed solely at employees without raising new capital, seeks to maintain Revolut's US$33 billion valuation from its 2021 funding round, bolstered by a doubling of FY2023 revenue to £1.7 billion and a growing customer base exceeding 40 million. As Revolut awaits its full UK banking license, it continues to expand its offerings, including launching an eSIM and advanced AI fraud protection, underscoring its confidence in achieving its high valuation.

Morgan Stanley at Work's fourth annual State of the Workplace Financial Benefits Study reveals a growing demand for equity compensation among employees and HR leaders at both public and private companies. The study highlights that equity compensation is a top driver of employee engagement and retention, with 95% of HR leaders and 80% of employees recognizing its motivational impact. However, awareness and education gaps persist, as only 38% of employees are aware of these benefits, indicating significant opportunities for companies to enhance their equity compensation education programs.