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AO staff to be rewarded through new incentive plan

Appliance retailer AO World is proposing to introduce an employee incentive scheme to enable staff to share in its success. The move follows a review of the… View Article

ELECTRICALS

AO staff to be rewarded through new incentive plan

Appliance retailer AO World is proposing to introduce an employee incentive scheme to enable staff to share in its success.

The move follows a review of the company’s existing remuneration structure and has been designed to support AO’s high growth strategy.

Called the AO Value Creation Plan, the scheme will be measured over five to seven years and will reward value created above a share price hurdle of £5.23, equivalent to a market capitilisation of £2.5 billion. This will represent growth of around 30% per year on Monday’s closing share price.

Over that hurdle, 10% of value created will be shared between all AO employees, although awards to executive directors will be capped at £20 million. To realise the full benefit of the scheme, AO said it will need to achieve a share price of at least £9.41, equivalent to a market capitilisation of £4.5 billion,  with the value maintained for at least two further years. 

AO’s founder and chief executive John Roberts said: “The AO VCP rewards exceptional performance and value creation and we will achieve it through our passion to serve customers brilliantly with a long term lens.  AO is now set up to benefit from the accelerated structural shift to online in the UK and Germany and our model is now truly scalable.

“It is a vote of confidence in our people and the future we’re building as well as  the embodiment of our One AO model because it rewards the exceptional value that the AO team is capable of creating together.”

In addition, Roberts has committed to donating 100% of any VCP reward he receives to help disadvantaged young people in the UK.

 

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