Professional Documents
Culture Documents
LTI Structure
LTI Structure
Points
Eligibility What happens to an employee with 4 HR to share the count of individuals
years 11 months service. Will a new set of reaching their fifth-year milestone as of
awards be granted next cycle—would we March 2025.
communicate now they are eligible next
year?
Incentive FIVE would carry a much lower The value of the award will be disclosed
Vehicle accounting cost to the awards if they were upfront upon granting, which will then be
delivered as shares now. That is because converted into specific number of shares
employees would realise value at the IPO at the IPO price.
price at vest, whilst the Company would
account for the expense at current fair
market value—the “gain” is free. Doing
this however (as an RSU scheme) would
sacrifices the ability to guarantee the
value at vest, making the plan harder to
communicate. Is this tradeoff desirable?
Funding Is the plan affordable if the LTI award Yes
Decisions cannot be granted via shares?
Are FIVE comfortable with the cost of the The revised dilution model to be
plan (from a dilution perspective) under circulated by AON, assuming that all
the maximum scenario (1.52%)? individuals within the critical group will
eventually receive a 3x award before the
commencement of vesting in the third
year.
Will FIVE adopt an annual or periodic Following the IPO, a new plan,
grant cycle thereafter? preferably an ESOP, will be introduced
for the employees.
Pay Internal equity perspective of employees Employees within the critical group will
Quantum within the critical group receiving differing receive either a 3x or 1.5x award. A 3x
Comparison LTI awards as a % of base salary award will be granted to individuals with
a rating of 5, while those with a rating of
4 will receive a 1.5x award. Individuals
with a rating of 4 will also receive a
retroactive additional grant upon
achieving a rating of 5, entitling them to
the 3x award.
Performance Assuming IPO occurs: If an employee Forfeit the 25% to be vested in that
Measure does not meet performance conditions in particular year for individuals who
a given year, are the shares awarded achieve a rating of 3. To be specific, if a
forfeited or rolled-over? With vesting for 3 3-rating is attained, awards will vest at
performers at 75% of target, proposal to 75%, at 100% for a 4-rating, and at
forego rollover (adds complication) 125% for a 5-rating.
Should the IPO bonus shares have a pay- The IPO bonus will be tied to a $2.5
out curve for performance just shy of the billion valuation, with the administrator
target IPO range of $2.25bn - $2.5bn having discretion over the bonus if the
(e.g., 0% - 100% vesting between $2bn achieved valuation falls short of the
and $2.25bn? target.
Apart from the valuation target, the IPO
bonus will not be contingent on any
vesting conditions, including individual
employee ratings.