Rippling Effect – More Industries Embrace Partnership
Pretium survey finds more companies use long-term incentives to reinforce alignment and promote partnership.
HONG KONG -- Long-term incentives have increased in Hong Kong and China to reinforce alignment of interest and partnership, according to independent management consulting firm, Pretium Partners Asia Limited ("Pretium").
Long-Term Incentive Practices Survey for General Industries shows the prevalence of additional long-term incentives has jumped from 67% to 70%, the relaxation of regulatory requirements has encouraged more Chinese companies to adopt share based incentives. The prevalence for Technology, Media and Telecommunication companies has reached 100%, cause by increasing popularity of the partnership model which has a rippling effect on other industries; more Consumer Goods companies, Transport and Utilities institutions and Financial Services companies have launched long-term incentives.
The survey examines the features of 204 long-term incentive plans in 100 international and Asian companies across industries. This includes deferred bonus plans and additional long-term incentive plans in the United States, the United Kingdom, Europe, Hong Kong, China, Singapore, Malaysia and Australia.
Lower prevalence of long-term incentives is found in Hong Kong and China (64%) when compared to other regions (70% and above). “With the loosening of regulatory restrictions and the rising popularity of the partnership model, more Chinese and Hong Kong companies are exploring long-term incentives as a means for interest alignment and talent retention, the gap will be closing soon”, said May Poon, Managing Partner of Pretium.
All the Technology, Media and Telecommunication companies (100%) adopt long-term incentives to reinforce interest alignment between the companies and the employees. Some of them have served as role models in using long-term incentives to promote partnership；this trend has a rippling effect on other industries such as Consumer Goods (100%) and Financial Services (70%). “Consumer Goods and Financial Services companies are adversely affected by the economic environment and new business model, but long-term incentives can provide a way out in the midst of uncertainties and business transformation by promoting partnership and interest alignment. Long-term incentives emphasize pay-for-performance, alignment of interest and meaningful ownership, thus performance shares and shareholding requirements can motivate employees who are on the same boat to drive behaviours towards business objectives.” said Ms. Poon.
About Long-Term Incentive Survey Report for General Industries
The Long-Term Incentive Survey Report for General Industries examines the key incentive features of 204 long-term incentive plans in 100 international and Asian companies across different industries. These include Utilities / Transport, Technology, Media and Telecom (TMT), Properties and Construction, Energy, Consumer Goods, Conglomerates and Financial Services in the United States, the United Kingdom, Europe, Hong Kong, China, Singapore, Malaysia and Australia. The Report covers deferred bonus plans and additional long-term incentive plans that are granted on top of annual bonus.
About Pretium Partners Asia Limited
Pretium Partners Asia Limited ("Pretium") is an independent management consulting firm that helps accelerate clients' growth and increase profitability through rewards, performance and corporate transformation. This includes a unique spectrum of management consulting solutions in incentive plan review and design, organization transformation, benchmarking, performance management, IPO corporate governance as well as mergers and acquisitions integration.