HONG KONG, CHINA--(Marketwired - May 9, 2016) - If someone works for a company for more than 10 to 20 years and the company performs far better than the market, then I think that person should be given the opportunity to benefit from the company's outperformance, according to NiQ Lai, Head of Talent Engagement, CFO and Co-Owner at Hong Kong Broadband Network Limited (HKBN). He explains, "We wanted our Talents who opt in to become Co-Owners to have the opportunity to do well if the company does well and to suffer if the company suffers; this is what we mean by alignment of interest."
For the talented people who have done so much to help HKBN grow and who have opted to become Co-Owners, they should be fairly rewarded instead of just taking home a stable income. This was the vision of NiQ and William Yeung, the CEO and Co-Owners of HKBN, leading them to engineer the company's management buyout (MBO) in 2012.
Unlike the more traditional method of granting stock options to a select group of senior executives, HKBN's Co-Ownership Plan invited all manager-level Talents to invest their own money into the company, as it is HKBN's belief that ownership has to be bought as it cannot be given.
Some managers initially raised concerns, as they were not fully convinced about investing in the company using their own money. Therefore, the investment invitation was made with favourable terms and managers could decide if they wanted to take part in the MBO or not. Of course, they also had to judge if they could bear the risks of investing a material part of their family's savings in the plan, recalls NiQ.
Eventually, most of the invited managers decided to join the plan. NiQ explains that most of those managers were quite familiar with the company's business performance, its development and the competition in the market -- and so were able to make informed decisions.
Initially, the Co-Ownership Plan only invited a handful of key managers to join. However, since NiQ and William found it difficult to choose just a few eligible managers, they extended this invite to all manager grade talents. Further, the pair decided to dilute some of their own preferential terms for the plan's expansion such that the other managers would actually enjoy better preferential terms than William and NiQ. In the end, around 100 were invited and 90 middle-to-senior managers invested HK$180 million dollars to become Co-Owners during the 2012 management buyout, which was an average of two years of their salaries or 10 years of savings, if you assume a 20% savings rate. During the initial public offering (IPO) in 2015, the value of the Co-Owners shares increased by about 6 times to around HK$1.2 billion.
In 2015, after the IPO, an expanded second phase -- Co-Ownership Plan II -- was introduced, in which around 400 supervisors and above-level employees were invited to participate, of which over 270 took up the invitation. Co-Ownership II plan involved HKBN Talents buying seven shares at full market price with the company matching three free shares with vesting 25%, 25% and 50% over 3 years. As such, this created a very strong alignment of interest between talents and shareholders, as the talents themselves become shareholders.
Over the years, NiQ has been very proud of the positive results of individual participants. "One of many examples is a 26-year-old Talent who joined the plan three years ago and has now acquired financial stability," explains NiQ. "He got engaged and now has the financial resources to put the down payment for an apartment, which is something very few other 26-year-olds can do."
NiQ says that the Co-Ownership Plan is not solely a platform for Talents to financially prosper with HKBN; it also changes people's mindset and improves their sense of achievement -- from salaried employees simply doing a job for the bosses to entrepreneurs on a common HKBN platform, who are working for themselves. He concludes, "If you are working for yourself, it is normal for you to strive for excellence."
HR Summit & Expo HK 2016 will have 25 business leaders and HR professionals providing actionable strategies for establishing a sustainable workplace and enhancing business performance. Through keynote presentations, small group discussions, workshops, case studies and debates, a wide range of important topics will be covered in the two-day event, including: leadership, change management, HR investment, talent acquisition, retention and management, training and development, employee engagement, corporate culture and social responsibility, workplace inclusion, performance assessment and enhancement, and much more.
HR Summit & Expo HK 2016 takes place from 12 to 13 May in Hall 1A of the Hong Kong Convention & Exhibition Centre (HKCEC). Conference tickets are now available at a variety of price options. For bookings, the full speaker list and the conference agenda, please visit: www.hrsummit.com.hk.
About HR Summit & Expo HK
HR Summit & Expo HK is organised by Diversified Communications with strategic partner HRM Asia. It is designed to bring together C-suite business executives, chief HR directors and other HR professionals from a broad spectrum of industries for the two-day conference and exhibition. At the summit, delegates can discuss challenges and best practices not only within the field of HR, but also with regards to overall company strategy, culture and direction, and how it will play a pivotal role in their future business. While on the expo floor, they will be able to speak to solutions providers and find services that fulfil the needs of their organisation to realise the potential of their people.
About Diversified Communications
Diversified Communications is a fast-growing international communications company headquartered in the United States. With 16 offices across 7 countries and 9 divisions, the company spans businesses across broadcasting, digital products, software, publishing and the production of market-leading events, with a product portfolio serving 16 industries in 14 countries and counting. In Hong Kong, Diversified Communications organises a growing portfolio of trade exhibitions and conferences, including Restaurant & Bar Hong Kong, Seafood Expo Asia, Natural & Organic Products Asia, Retail Asia Expo, Omni-Channel Retailing Conference, HR Summit & Expo HK, Learning & Teaching Expo, and Asia-Pacific International Conference. All the events embrace an established relationship with key suppliers and buyers in different industries.
About HRM Asia
HRM Asia is a private limited company registered in Singapore since 2002. They specialise in dedicated HR magazines and world-class events, providing an array of thought-leading HR discussion and information to HR professionals in Singapore and across Asia. Since their inception, HRM Asia has played an important part in connecting HR professionals across all sectors. HRM Asia concentrates on the issues and challenges facing the HR industry, with in-depth features and analysis of what really matters to HR professionals.
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