Challenge
A global oilfield services company headquartered in Houston recently underwent a major transformation by merging with another OFS company and going public. As part of the transition, the company’s Board of Directors approved a new equity and long-term incentive plan to retain and motivate its executives and top management.
However, implementing this plan presented significant challenges for the HR department, including:
Global Scope: the company had operations across multiple countries, each with its own legal and regulatory frameworks.
Compliance: Ensuring the equity plan adhered to the regulations of each country where equity was to be offered.
Program Design: Developing a sustainable long-term incentive plan that aligned with the company’s business objectives and provided clear value to its executives.
Employee Education: Effectively communicating the program's details to executives and management, ensuring their understanding and engagement.
The company's Senior Vice President of Human Resources reached out to NB, a trusted HR consulting firm, to design and implement a comprehensive global equity and long-term incentive program.
Solution
NBBS took a strategic approach to address the company’s challenges:
Budget Allocation: NB worked closely with the company to create an allocated budget for the equity plan, ensuring it was financially viable while competitive enough to attract and retain top talent.
Global Compliance Review: NB conducted an extensive review of the legal and regulatory requirements in each country where the company operated, ensuring the equity offerings complied with local laws. This step was critical to avoid potential legal risks and ensure smooth global implementation.
Program Design: NB designed a global equity and long-term incentive program that met the company’s strategic needs. The program featured:
Equity Distribution: A clear, structured plan for how equity would be distributed among executives and top management.
Vesting Schedules: Competitive vesting schedules that incentivized long-term performance and retention.
Eligibility Criteria: Guidelines define which employees are qualified for the program, focusing on key executives.
Administrative Guidelines: NB developed detailed administrative guidelines to ensure the company’s Global Compensation department could effectively manage the program. These guidelines outlined processes for equity distribution, compliance checks, reporting mechanisms, and accurate record-keeping.
Employee Communication and Training: NB created targeted communication materials and conducted training sessions to educate executives and top management about the equity plan. The training covered the program’s benefits, vesting timelines, and the long-term impact on employees' compensation, helping to build engagement and understanding.
Result
The global equity and long-term incentive program was successfully implemented and managed by the company’s Global Compensation Department. Key outcomes included:
Seamless Global Implementation: The program was rolled out across all relevant countries, with no regulatory or compliance issues as a result of NB’s thorough compliance review.
Sustainable and Engaging Plan: The carefully designed equity program aligned with the company’s business goals and was well-received by executives and top management, ensuring strong participation and buy-in.
Efficient Program Management: NB's administrative guidelines enabled the company’s HR and Global Compensation team to manage the equity plan effectively, ensuring its long-term sustainability.
High Employee Engagement: The targeted communication and training materials resulted in high levels of understanding and enthusiasm for the program, driving long-term retention and motivation of key talent.
Through its partnership, the company successfully navigated the complexities of creating a global equity and long-term incentive plan, securing a critical tool for retaining top executives and key talent, and maintaining a competitive edge in the oilfield services industry.