Share plans should be made as simple and straightforward as possible, said Justin King, chief executive at J Sainsbury, during the keynote address at the IFS Proshare employee share plans conference on 10 October.
“We have to peel away the mystery and make it as simple as possible,” he said. “The main reason, and I know this from talking to our employees, that more don’t sign up and take the opportunity to own shares in the company is a combination of complexity and timeframe.”
Sainsbury’s, which has 150,000 employees, has been offering a sharesave scheme to staff since 1981. In 2011, it launched its 20by20 Sustainability plan, which aims to grow the number of employees with shares in the business by 25% by 2020. Currently, the supermarket has around 40,000 employees with shares in the company.
“Share ownership is part of the bigger picture,” said King. “We believe strongly it is one of the most powerful factors in employee engagement.”
Sharesave schemes allow employees to contribute between £5 and £250 a month out of net pay, which is used to purchase discounted shares after three, five or seven years.
King added: “For most people, particularly younger people, even three years is a long time, and five years seems like forever. Shorter timeframes would be a hugely powerful way to engage them.
“We can ensure framework is made as simple and straightforward as possible so that first engagement with the opportunity to invest in shares is an easier decision to make.”