Speaker 1: Our expectations around wealth and work are changing. For decades,
Speaker 1: you would earn a salary, take it home as your
Speaker 1: reward and use that to build your long term wealth.
Speaker 1: But is salary alone still enough to get you where
Speaker 1: you want to go? And could it be just as
Speaker 1: rewarding to have a real state in the work that
Speaker 1: you're doing. I'm Laura Marwick and I'm here with Susanna
Speaker 1: Batley of Chezy's Business and Andrew Morrow of Parts Trader,
Speaker 1: recently acquired for six hundred and fifty million dollars. We're
Speaker 1: going to ask them about ownership opportunities and how people
Speaker 1: really want to get paid.
Speaker 2: Investing involves the risk you might lose the money you
Speaker 2: start with. We recommend talking to a licensed financial advisor.
Speaker 2: We also recommend reading product disclosure documents before deciding to invest.
Speaker 2: Everything you're about to see and here is current at
Speaker 2: the time of recording.
Speaker 1: Sus and Andrew. Welcome to shed lunch.
Speaker 3: Thank you, Thank you.
Speaker 1: Sus So. Cheesy's has recently conducted some research that showed
Speaker 1: that eighty percent of respondents see that they would take
Speaker 1: at least part of their remuneration in shares if they
Speaker 1: were given the opportunity. What does that kind of say
Speaker 1: to us about these changing expectations about the way that
Speaker 1: we're compensated.
Speaker 3: Yeah, well, I think you said it. Expectations are changing,
Speaker 3: and I think when you look at a range of
Speaker 3: factors that are converging, it's no surprise employees are looking
Speaker 3: at their pay and saying, actually, while this is important
Speaker 3: for paying the day to day bills, it's just not
Speaker 3: enough to build long term wealth. And in fact, when
Speaker 3: we look at data over a long period of time,
Speaker 3: wealth development does not come from wages. It comes from ownership.
Speaker 3: And I think employees are really spotting that and looking
Speaker 3: at what levers they can pull in order to make
Speaker 3: sure that they can build wealth over long periods of time.
Speaker 1: Actillary has sort of been like the definitive way to
Speaker 1: build your wealth for a really long time. Why do
Speaker 1: you think that people are kind of coming to this
Speaker 1: realization now?
Speaker 3: Yeah, Well, a few things. One is that cost of
Speaker 3: living has increased substantially. And when we look over decades,
Speaker 3: capital markets have produced enormous wealth, but that hasn't necessarily
Speaker 3: flown through two wages. So, for example, let's take New Zealand.
Speaker 3: Since nineteen eighty, the stock market has produced returns of
Speaker 3: or has increased by almost forty times, whereas wages have
Speaker 3: increased around eight times. So you're seeing a massive divergence
Speaker 3: between ownership and the returns flown through owners versus our
Speaker 3: wage earners. So I think people are looking at that.
Speaker 3: And I think a really big factor is property. Where
Speaker 3: you've seen older generations been able to do very well
Speaker 3: through owning property, and I think younger generations are rightly
Speaker 3: seeing that probably those opportunities are not there for them.
Speaker 3: So what are other ways that they can participate in
Speaker 3: the capital markets in the growth of the economy. And
Speaker 3: I think that you know, this is clearly one of
Speaker 3: those leavers.
Speaker 1: And Andrew, You've spent years helping to build Parts Trader,
Speaker 1: and that sort of needed in this recent acquisition. Because
Speaker 1: Part Straighter had this employee share scheme, your team has
Speaker 1: gotten to have a share in that success. Why did
Speaker 1: part straight to choose to offer employees shares instead of
Speaker 1: maybe just like a higher salary more bonuses.
Speaker 4: Originated from one of the founders who had actually been
Speaker 4: quite successful with trade me and he's seen there the
Speaker 4: benefit of employees participating in the upside of growing value
Speaker 4: and also the philosophy that the employee is going to
Speaker 4: do a big part of growing the value. So when
Speaker 4: you're in an early stage company, you really have some
Speaker 4: good ideas, a thesis, really, but there's nothing there other
Speaker 4: than belief for people to show up every day, and
Speaker 4: so you really want to reward them and you want
Speaker 4: them to feel part of it and to act somewhat
Speaker 4: like owners because the original founders, the investors, the managers,
Speaker 4: they can't be everywhere. You know, we want people to
Speaker 4: grow with the business and to think like owners, to
Speaker 4: look after the customers, to make wise decisions. And you know, ultimately,
Speaker 4: in an early stage business you work more than forty
Speaker 4: hours a week at times, and times it's pretty tough
Speaker 4: and you have to keep going. The ownership philosophy and
Speaker 4: the incentive behind that is really valuable. So it's one
Speaker 4: part of it. The other part of it is, you know,
Speaker 4: the reward and at early times in a business, maybe
Speaker 4: you're not at the upper end of market salary. Sometimes
Speaker 4: you can't afford it. So how do you recognize and
Speaker 4: reward those people? And they are often attracted to ownership
Speaker 4: and doing something slightly different. There's a reason they've chosen
Speaker 4: to not be in a corporate and therefore there's some
Speaker 4: different drivers as to how they might be motivated and
Speaker 4: that kind of thing. But so you're sharing the upside,
Speaker 4: and I think that's a really important part of it.
Speaker 4: And that's where good owners and good founders, you know,
Speaker 4: really understand it that they're sharing the upside and so
Speaker 4: why not make the upside as much as you can.
Speaker 1: That's quite a philosophical kind of approach.
Speaker 4: Well, yes it is, but it also plays out economically
Speaker 4: if you can get it right.
Speaker 3: And to Andrew's point, that's that's why we get really
Speaker 3: excited about this as a mechanism for broad based ownership,
Speaker 3: because when it is done right, it can create that
Speaker 3: genuine win when you know, employers can benefit from greater retention,
Speaker 3: greater incentivization and really driving that employee owner mindset. And
Speaker 3: for employees, we can we see in the data that
Speaker 3: they can genuine, genuinely generate long term wealth through these
Speaker 3: schemes if there is good upside, so you know, done right,
Speaker 3: they can they can be a great win win.
Speaker 1: On that note of impact, Andrew, how have you seen
Speaker 1: the real impact of ownership from within the business, whether
Speaker 1: that's with employee retention or maybe improving culture with everybody
Speaker 1: having kind of a shared goal to work towards.
Speaker 4: We've got a New Zealander and US components to our business.
Speaker 4: So we had to have a plan that worked across
Speaker 4: both jurisdictions, and we looked at she is issuing shares
Speaker 4: or of sheer ops or things like that in natural
Speaker 4: in securities and both jurisdictions. Was hard. So we took
Speaker 4: a cash based, effectively phantom plan that operated on an
Speaker 4: annual grant to all staff the qualified and then that
Speaker 4: vested over three years, So if you left within the
Speaker 4: three years, you got no return because creating value takes
Speaker 4: a period of time, and so that was our belief
Speaker 4: that it was reasonable, and so we took that and
Speaker 4: at the end of the three years we cashed that
Speaker 4: period out. We set a target for sheer appreciation private
Speaker 4: equity sort of levels at twenty five percent compounding paranum,
Speaker 4: so a reasonable clip. Then if we achieved all of that,
Speaker 4: we got one hundred percent. Staff got one hundred percent
Speaker 4: of what the target was. You kind of doubled them
Speaker 4: three years. If you're compounding at twenty five percent paranum,
Speaker 4: which is pretty good. During time, we paid out cash
Speaker 4: along the way and that was that was a good
Speaker 4: reward because it ended up being a longer journey than
Speaker 4: we thought. But it also helped those people who had
Speaker 4: been for a while, some of the key people that
Speaker 4: we really needed to stay on. They ended up getting
Speaker 4: an annual bonus as a result of vesting. But these
Speaker 4: are the people who have been there for quite a
Speaker 4: long time now, so three years and four years and
Speaker 4: five years, you know, so it becomes that annual incentive.
Speaker 4: So it was very effective in that way. And it
Speaker 4: was also so we'd have the results to the valuation
Speaker 4: would be at the end of the calendar year and
Speaker 4: payment around March, and people would really look forward to
Speaker 4: that and it was a it was a moment and
Speaker 4: it became sort of the part straight or calendar, you know,
Speaker 4: like what's the payment going to be? How do we go?
Speaker 4: And so we got everybody aligned in the success in
Speaker 4: a place to an obligation on management to communicate really
Speaker 4: well to all staff. So culturally it was very effective
Speaker 4: about just doing all those right things reinforcing the behavior.
Speaker 4: If we as managers were behind on communication, we were
Speaker 4: asked and so we just fount up as a result.
Speaker 4: Terrific retention, you know, we've got some of the tech,
Speaker 4: and then at the end there's been an, i guess
Speaker 4: what's called a cliff festing of all the three tranches
Speaker 4: that were running. So on the actual payment settlement, which
Speaker 4: was first of April this year, that was all paid
Speaker 4: out in one go, so it was a nice, nice,
Speaker 4: decent bonus for people.
Speaker 1: It sounds like that's kind of the best of both
Speaker 1: worlds there where it almost is working like a bonus structure,
Speaker 1: but then there's also that sort of delayed gratification element
Speaker 1: of it as well. How did that feel to have
Speaker 1: the acquisition come through and know that that success was
Speaker 1: going to be shared in a very real way with
Speaker 1: the team.
Speaker 4: It's great because otherwise it's uncomfortable because some people have
Speaker 4: benefited and some people haven't, and not everybody's got the
Speaker 4: ability to put money away. So one of the discussions
Speaker 4: around this is how do you structure it? Should they
Speaker 4: contribute themselves as challenging because then you've got the ones
Speaker 4: whose personal situations permit them to contribute and others who
Speaker 4: are already maxed out and can't, or boarding others in
Speaker 4: their family or things like that. So if you can
Speaker 4: get something that is broad based at least for some
Speaker 4: level of participation, and you see at other levels, you know,
Speaker 4: executives do get often share options or other remuneration. That's
Speaker 4: that's kind of different to the broad based stuff we're
Speaker 4: trying to talk about here. So when you had the
Speaker 4: wide participation with everybody getting something and it's all related
Speaker 4: to the returns, it's compelling, it's resatisfying.
Speaker 1: Employee share schemes are maybe stereotypically kind of associated with
Speaker 1: these like high tech growth companies. SpaceX is the big
Speaker 1: example that maybe springs to mind, but these do also
Speaker 1: show up in other kind of business models, other industries.
Speaker 3: Yeah, totally. I think that it's actually quite a big
Speaker 3: myth is that, you know, option schemes or share schemes
Speaker 3: are just for tech, and that's absolutely not true. You know,
Speaker 3: we were with a range of companies, sort of larger
Speaker 3: corporates in different industries, whether that's energy or telecommunications or
Speaker 3: other industries over long periods of time, and often these
Speaker 3: industries have very long tenure. They can be a really
Speaker 3: meaningful part of someone's you know, misting for retirement. In
Speaker 3: New Zealand, we have a tax exempt framework that can
Speaker 3: work really well for broad based schemes and have some
Speaker 3: of the components that Andrew's been talking about, like three
Speaker 3: year vesting, and you know, we see employees that might
Speaker 3: have worked for twenty years, they've got one thousand dollars
Speaker 3: each year in these in these shares, and after twenty
Speaker 3: years with dividends reinvested, it's over one hundred thousand dollars.
Speaker 1: Are there any other misconceptions that we tend to see
Speaker 1: crop up around employe ownership?
Speaker 3: I mean, I think sometimes it feels quite binary sort
Speaker 3: of you know, you're either giving shares or you're not.
Speaker 3: And I think that the scheme that Andrew talked about,
Speaker 3: a fantom scheme, is a great example where there are
Speaker 3: actually lots of different options available. You know, phantom schemes
Speaker 3: where you are tracking the share price so employees get
Speaker 3: the economic benefit of being an owner, but it's settled
Speaker 3: in cash rather than shares at the end. There can
Speaker 3: be a great example. I also think, you know, there
Speaker 3: is so much flexibility around contributions, whether that's employer contributed,
Speaker 3: it can be a hybrid of both. We think that
Speaker 3: they work really well where there is some element of
Speaker 3: employer contribution that is broad even if employees get the
Speaker 3: option of contributing over and above having some base element
Speaker 3: where everyone is getting a piece of that pie, a
Speaker 3: piece of that upside is very very powerful. Another point
Speaker 3: I would add in the data is that there is
Speaker 3: a lot of appetite for shares. I mean, that's what
Speaker 3: we found doing the research, is that eighty percent of
Speaker 3: employees will be willing to get some of their salary
Speaker 3: as shares, so overwhelming, you know, majority. But there is
Speaker 3: a big education gap where about two thirds of employees
Speaker 3: surveyed are not familiar with employee share schemes. So they
Speaker 3: want equity, but they're not familiar with some of their structures.
Speaker 3: So I think that's where a lot of the opportunity is.
Speaker 3: That's there is an education gap to bridge.
Speaker 1: And for employees who might not be super familiar with
Speaker 1: these concepts, how does ownership tend to pay off, Like,
Speaker 1: whether that's through acquisitions or through going public, how do
Speaker 1: they actually end up getting financially rewarded for structures like these?
Speaker 3: Yeah, so if you work at a company that is
Speaker 3: already listed, then that's obviously quite a big advantage because
Speaker 3: there's already liquidity in those shares. So once they vest
Speaker 3: in the yours. Then you can sell them any time,
Speaker 3: or you can hold on to them and reinvest those
Speaker 3: dividends over periods of time. For a private company, and
Speaker 3: the majority of companies in New Zealand are private, it
Speaker 3: looks a little bit different. Sometimes it is a big
Speaker 3: transaction like an acquisition that creates that liquidity event for
Speaker 3: employees to get to get paid or get the cash.
Speaker 3: Other times, for companies that have been private for a
Speaker 3: long time, they've created their own liquidity mechanisms, so they might,
Speaker 3: for example, particularly if they're profitable, be buying back shares
Speaker 3: every year so that employees can sell some shares and
Speaker 3: get that liquidity. And actually a really great global example
Speaker 3: of that Stripe, the payment technology company, where you're sort
Speaker 3: of assumed that Stripe would be listed by now, we
Speaker 3: have seen a real move for companies to stay private
Speaker 3: for much longer, and Stripe have quarterly windows, so every
Speaker 3: three months they're running an event for employees to sell
Speaker 3: their shares back to Stripe and get cash if they
Speaker 3: want so.
Speaker 1: Ownership, however, is no guarantee of having like a windfall,
Speaker 1: and in fact it can go the other way as well.
Speaker 1: There's maybe certain kind of scheme structures that might be
Speaker 1: more prone to exposure than others. And I think you
Speaker 1: might have a few war stories.
Speaker 4: Yes, well, I do some from personal experience investing my
Speaker 4: own money in companies that I've been part of starting.
Speaker 4: You could call that a shareplan of sorts, but more generally,
Speaker 4: when you're getting out into the wider things, when the
Speaker 4: share price goes down and you've got employees who are
Speaker 4: out of the money, it really depends if you ask
Speaker 4: them to borrow money to buy the shares, then they
Speaker 4: have a debt, and then they've got an asset with
Speaker 4: less than the debt. That's not a good place to be.
Speaker 4: So think about structuring. And certainly when you go out
Speaker 4: to all staff, they won't all understand the plan as
Speaker 4: much as you try and educate them and things like
Speaker 4: that to the pitfalls and things. And as an employer
Speaker 4: you are selling the upside. You've got to talk about
Speaker 4: the risks and be quite transparent. But it is a
Speaker 4: challenge to get those things right. So think about the
Speaker 4: portion of remuneration, think about whether it's employer contributed the
Speaker 4: bit that's at risk, and over and above, they still
Speaker 4: need to be able to pay the rent and pay
Speaker 4: the groceries and things like that over and above it.
Speaker 3: Yeah, I completely agree. I think, particularly for broad based schemes,
Speaker 3: I think there should be that sort of base portion.
Speaker 3: I really think it is better if that's employee funded,
Speaker 3: because you know, all investing comes with risk, and you know,
Speaker 3: if anything, the world's got more volatile, and you know,
Speaker 3: who knows what can happen, and it can be total
Speaker 3: external forces that can mean that share prices reduced materially,
Speaker 3: that has nothing to do with the employees contribution. I
Speaker 3: was familiar with one case where it was in the
Speaker 3: healthcare industry. You know, healthcare workers are in high demand.
Speaker 3: It's really really important to be able to retain them.
Speaker 3: They had a scheme for reasons sort of outside of
Speaker 3: the company's control. The share price dropped materially, and so
Speaker 3: because employees were asked to buy in through and through
Speaker 3: a loan with the company, suddenly you know, their shares
Speaker 3: were worth far, far less than the loan they had,
Speaker 3: And that goes from what could be quite a good
Speaker 3: incentivization tool to incredibly disincentivizing. So, you know, I think
Speaker 3: that for a broad based scheme, it tends to work
Speaker 3: better when it is open above that base pay and
Speaker 3: it is employee funded.
Speaker 1: Let's say we're in the shoes of an employee who's
Speaker 1: maybe got the option on the table of taking either
Speaker 1: a higher salary or taking a portion of that remmuneration
Speaker 1: as equity. What are the trade offs that they would
Speaker 1: need to consider in making that decision.
Speaker 3: I'd say, first of all, make sure you really understand
Speaker 3: the detail. So you know, there are often tax implications,
Speaker 3: so make sure you understand those. Making sure that you understand,
Speaker 3: you know, what the what the goal is of the
Speaker 3: company if it's private, is there a target window in
Speaker 3: terms of getting acquired or some sort of other events.
Speaker 3: So really try and understand, you know, what the terms
Speaker 3: are of the offer, what that actually means, and the
Speaker 3: you know, your employers should be communicating that well because
Speaker 3: that is really important for employees to understand. But yeah,
Speaker 3: I'd be thinking about is this company company that I
Speaker 3: really believe in? Is this a company that I think
Speaker 3: is going to do really well? And I think really
Speaker 3: think about you know, if it's not. If I'm not
Speaker 3: taking that and I'm taking your higher salary, then how
Speaker 3: us I make getting ownership because wealth development does come
Speaker 3: from that. You know, a wage is fixed it's you know,
Speaker 3: it doesn't have that upside that ownership and you know
Speaker 3: shares or you know, in the past property. I think
Speaker 3: that for when people thinking about their long term wealth,
Speaker 3: it is really important to make sure that you are
Speaker 3: participating in that upside. Somehow.
Speaker 1: You sort of touched on tax there, and I know
Speaker 1: that tax can be quite complex complex in this domain.
Speaker 1: What are some of the other risks that you kind
Speaker 1: of want to understand before you say yes to getting
Speaker 1: issued employees shares? I mean, concentration risk is one.
Speaker 3: You know, if you're working for that employer and you're
Speaker 3: getting shares as part of your muneration too, you're pretty
Speaker 3: tied in and pretty concentrated to that opportunity. I don't
Speaker 3: think that's necessarily necessarily a reason not to do it,
Speaker 3: but it is just going in eyes wide open. That
Speaker 3: would be one that I'll be thinking about. And I
Speaker 3: also think that liquidity risk as well, like really thinking
Speaker 3: about you know, when the timing of that what needs
Speaker 3: to happen in order for me to actually get paid
Speaker 3: cash and for this paper value to turn into cash,
Speaker 3: which ultimately at some point in time needs to do
Speaker 3: for that to be the reward that you want. It
Speaker 3: to be, and.
Speaker 4: Markets go up and markets go down, and fortunes go
Speaker 4: up and go down, and so it's not it's not
Speaker 4: a straight line. So I think you've got to think
Speaker 4: about your personal situation. And Susanna says, maybe put some.
Speaker 4: It depends on your risk appetite. So I did broke,
Speaker 4: didn't break the rules. I chose to concentrate. And it's
Speaker 4: you know, it works out sometimes and other times it
Speaker 4: hasn't for me. So do what you will. But you
Speaker 4: could take a portion and put it into a fund
Speaker 4: that you know, maybe shares as well as your employer
Speaker 4: if you've got the choice. And it does change things.
Speaker 4: And these things are done for capitalist reasons. The holders
Speaker 4: are expecting a return on this investment and the employees
Speaker 4: over and above things, and it does, you know, it
Speaker 4: becomes a hearts and mind's game. So the mind being
Speaker 4: the logic. I'm going to go to work, I'm going
Speaker 4: to do my job. But the hardest I'm an owner
Speaker 4: of this business. I actually I care over and above
Speaker 4: my nine to five and my colleagues are invested in this,
Speaker 4: in this together, and that is powerful, and that's where
Speaker 4: you know you can create value. You can get through
Speaker 4: things you can innovate and do more creative stuff, not
Speaker 4: so you can't do it otherwise, but it just sort
Speaker 4: of triggers and supports all of that, triggers the why
Speaker 4: behind doing all of those sort of extra things, which
Speaker 4: is pretty cool.
Speaker 3: I think that's such an important point, and I think
Speaker 3: it does. I think it does change you when you
Speaker 3: become an owner and really changes the mindset that you have.
Speaker 3: And what's really interesting is at Shares is when we've
Speaker 3: sometimes done customer interviews, their employee equity scheme is often
Speaker 3: their first foray into ownership outside of the KIPI saver,
Speaker 3: and so it can be really the start of a
Speaker 3: journey of wanting to become an owner and thinking about
Speaker 3: capital markets and a whole different way than they had
Speaker 3: contemplated before.
Speaker 1: It's like a gateway drug.
Speaker 3: Done the best way.
Speaker 1: So you're both real champions of this kind of ownership
Speaker 1: culture for you both looking ahead, what would kind of
Speaker 1: the ideal pay packet look like, say, ten years down
Speaker 1: the line, is that still mostly salary? Is it looking
Speaker 1: like a higher portion of shares?
Speaker 4: Certainly, for me, ownership's key and has been part of
Speaker 4: what I do for the last thirty years. So I
Speaker 4: wouldn't take a job without it, And to the extent
Speaker 4: I started an own company because I thought I should
Speaker 4: have been paid more out of an exit that I've
Speaker 4: done a lot of good work on and that didn't
Speaker 4: go so well, So I got the lesson there as well.
Speaker 3: I think in ten years, what I would want as
Speaker 3: this really to be the expectation for employees that their
Speaker 3: remuneration does include ownership, and that that expectation is on
Speaker 3: employers as well, is that actually, if I want to
Speaker 3: a trait and retain the best talent, then employee equity
Speaker 3: has got to be part of that mix. Also, I
Speaker 3: think that over the last decade, we've seen this, you know,
Speaker 3: this massive gap in terms of you know, capital markets growing,
Speaker 3: but that being shared by far too fewer people and
Speaker 3: not being translated into higher wages necessarily. And I think,
Speaker 3: if anything, that's actually going to increase with AI and
Speaker 3: I think that we're going to see a wider gap
Speaker 3: between returns accruing to owners versus returns accruing to wage earners.
Speaker 3: And so I think it's actually going to be even
Speaker 3: more important for people to raally think about how do
Speaker 3: I get how do I participate in the markets. How
Speaker 3: do I participate in ownership because I think otherwise the
Speaker 3: wealth gap can increase. It's interesting in the research, eighteen
Speaker 3: percent of gen Z employees have got equity as part
Speaker 3: of their last pay rise or bonus, and that's versus
Speaker 3: three percent of gen X and our baby bombers. These
Speaker 3: Gen Z employees will keep advancing in their careers and
Speaker 3: will be more senior, and I think that we are
Speaker 3: just seeing this wave of this younger generation come in
Speaker 3: expecting more in terms of equity. So my hope is
Speaker 3: that that really sort of changes things in quite a
Speaker 3: material way. And the norm is just you know, equity
Speaker 3: is part of remuneration if you want to attract the
Speaker 3: best talent. I think the other thing that I would
Speaker 3: say is, you know, in the US, there seems to
Speaker 3: be this culture of employee equity that has been around
Speaker 3: for much longer. And it was interesting. I was talking
Speaker 3: to a director who who is American who's come to
Speaker 3: New Zealand and she was observing. She said, you know,
Speaker 3: it's fascinating in the States for middle managers and above
Speaker 3: it is the big thing you're negotiating is not your
Speaker 3: base pay, it's your equity. Like it's your incentive that
Speaker 3: is the big thing you're negotiating, she said. In New Zealand,
Speaker 3: we just haven't sort of got that culture yet where
Speaker 3: you know, we're quite fixated on wages, and yes, wages
Speaker 3: are important for paying the bills, do not get me
Speaker 3: wrong on that. But you know, we do need a
Speaker 3: mindset where we are thinking about that upside, thinking about
Speaker 3: that equity, and I think it's coming. So I'm excited
Speaker 3: to see, you know, how that translates in the next decade.
Speaker 4: As an employee, when you do get your share ownership,
Speaker 4: my stages is that you show up to work like
Speaker 4: an owner and you think and act and innovate and
Speaker 4: create and work with your people and your customers and
Speaker 4: everything like that like an owner. So then it becomes
Speaker 4: self fulfilling for the owners to do more of this
Speaker 4: because it's sharing and with the people who are creating
Speaker 4: a big chunk of the wealth. But Sinceana says, most
Speaker 4: of it, you know, through the way things are structured,
Speaker 4: goes to the owners right now, and.
Speaker 3: It can really change behavior. Like you know, when I
Speaker 3: go into my local four square, I always get amazing
Speaker 3: service and if I'm looking for a product, you know,
Speaker 3: they will always do whatever they can to help me.
Speaker 3: And you know, that real owner mindset just comes through
Speaker 3: so strongly, you know, whereas you know, I can be
Speaker 3: in a large retail store where you know the employee
Speaker 3: is not incentivized at all, and you know it can
Speaker 3: be pretty impactful the difference. So, you know, the more
Speaker 3: that we can be driving and empowering that ownership mindset
Speaker 3: where you know the employees do feel that discretionary they
Speaker 3: to make that discretionary effort because they do feel, you know,
Speaker 3: truly like an owner. It's yeah, it's hugely beneficial for
Speaker 3: the company for you know, wider economic benefits.
Speaker 1: And do you think it would be fair to say
Speaker 1: that actually for the employee it might make their work
Speaker 1: feel more meaningful as well, because you're not so alienated
Speaker 1: from like I'm just punching the clock for the benefit
Speaker 1: of somebody.
Speaker 3: Else totally, I mean real agency.
Speaker 4: Yeah, absolutely. And then the other thing is that your
Speaker 4: conversation is mature and in terms of level understanding, and
Speaker 4: you know, things going really well and we're all hanging
Speaker 4: in there for this new customer when or whatever, and
Speaker 4: then you know something's going on in the operation, so
Speaker 4: we will pile it and you're in it together, and
Speaker 4: together we're stronger.
Speaker 1: So if you, guys, we're having a conversation with say
Speaker 1: a young New Zealander who might be going looking for
Speaker 1: their first job, or just anyone who's looking for a
Speaker 1: new job, what conversations would you encourage them to be
Speaker 1: having when they're sort of in those salary negotiations. I
Speaker 1: would be asking about it.
Speaker 3: I'll be asking the employer, you know, what mechanisms they
Speaker 3: have for me to get equity or get some sort
Speaker 3: of incentive. And I think as an employer, that should
Speaker 3: be great news. If you're hearing an prospective employee wanting
Speaker 3: to get that upside, wanting to get that incentivization, I
Speaker 3: would have thought from an employer, that's you know, that's
Speaker 3: a really that's a green flag.
Speaker 4: It's an absolute green flag. And also the share ownership
Speaker 4: takes a bit of time. So if you think, you know,
Speaker 4: certainly early in careers sometimes people changing around, they're actually
Speaker 4: not going to get that much benefit from you know,
Speaker 4: if they're changing. But if somebody's coming in with my ideas, keen, enthusiastic,
Speaker 4: committed and talking about equity, thinking I'm going to invest
Speaker 4: in this person, I'm going to train them, I'm going
Speaker 4: to support them, I'm going to fast track them in
Speaker 4: terms of trying to encourage them to go for it.
Speaker 4: So so it becomes self fulfilling, you know, for the firm,
Speaker 4: for the company, and also for the employee. Not everybody's
Speaker 4: going to give that to you straight up. Way. You
Speaker 4: might have to earn it, you might have to qualify
Speaker 4: for it, but if you don't ask, you don't get.
Speaker 4: And also we're all in sales. It doesn't matter what
Speaker 4: our job is, so you do need to just say listen,
Speaker 4: I'm so committed. I'm prepared. I really like your company.
Speaker 4: I've done the research on things like that. I'm prepared
Speaker 4: to take some remuneration and equity as opposed to pure
Speaker 4: cash salary. Even if you don't get it, you're more
Speaker 4: likely to get the job for a start, because that's
Speaker 4: a powerful statement and then also shows belief and people
Speaker 4: will ask you what are you going to do about it,
Speaker 4: and say, well, I can't tell you all the answers.
Speaker 4: You have to hire me first and then I can
Speaker 4: show you. But you sort of get into this much
Speaker 4: better conversation, and it also changes the way you'd even
Speaker 4: think about going to a job interview, you'll show up
Speaker 4: thinking about making the place better and for customers, for shareholders,
Speaker 4: for their community, all those sort of things.
Speaker 1: Thanks very much Susan Andrew for joining us today, and
Speaker 1: thank you to you for tuning in. We'll see you
Speaker 1: next time. Quite h