excellence in action: the unilever global mobility policy · pdf fileunilever unilever was...

Excellence in Action: the Unilever Global Mobility Policy

Leonie Baggott, Employee Services-HR, Unilever (UK)Amit Banker, Partner, EY (US)

Mirjam Dreyfuss, Senior Manager, EY (US)Debbi Marcus, Manager, Unilever (US)

UnileverUnilever was formed in 1930 from two companies: Margarine Unie and Lever

Brothers.

We are one of the world’s leading suppliers of fast-moving consumer goods.

Our products are sold in over 190 countries and used by 2 billion

consumers every day.

Our Purpose• To make sustainable living commonplace. • Create a better future every day, with brands and services that help

people feel good, look good and get more out of life.

Our Priorities• First to our consumers – then customers, employees, suppliers and

communities. • When we fulfill our responsibilities to them, we believe shareholders

will be rewarded.

Our Vision• Double the size of the business, while reducing our environmental

footprint and increasing our positive social impact.

Building and strengthening our Global Leadership Team

Assessed our policies for our International Assignees and Global Leadership Team

A Global Reward Plan for our Global Team

Unilever employment structureSVP & Unilever Leadership Executive management level – split into 2 levels

VP management level –split into 2 levels

Directors– middle management split into 2 levels - eligible for share awards

First management level employees –split into 3 levels

Other

1980• Unilever ran a host-based

assignment policy that was widely regarded as quite generous for 35 years

2007• The policy changed to a more

typical home-based, equalised policy (simultaneously outsourcing all IA administration)

2012• After seeking input from the

business and (using innovative crowd-sourcing technology) input from the assignees as well, the policy was changed again

• A host-based approach was re-introduced along with a global pay structure called Euronet to deal with senior leadership pay and a cadre of ‘globally mobile’ employees at lower work levels

A brief history of mobility...

Compensation BucketsGlobal Leadership

(Euronet)Global Assignees

(Euronet)

Host Based Assignees(host based compensation

with allowances)

Locals(host based compensation)

All Employees

• We asked the business what theywanted

• We asked the assignees what theywanted

• We set up a working group to establishthe basic rules based on this feedback

• Verified these with the HR Leadership team • And then set about designing the details

‘Crowd sourcing’ software helped us to focus on the most important issues.

How we arrived at thenew policy approach

2nd GA

3rd GA

2nd

3rd

1st IA1st

3 years 3 years 3 years 3 years

Host‐Based

Domestic

Relocate, Repatriate, 

Localise or Exit

Timeline

RelocateLocalise orExit

4th

RelocateLocalise orExit

Euronet

End of Assignment Options

If a host-based assignee returns home and goes on assignment at any time during the next three years they will move onto the Euronet policy. If they go on assignment after three years they will go as a host-based assignee.There is no repatriation option when a Global Assignment ends since the link to a ‘home’ base has been cut. However, an employee can relocate permanently to a new location, in which case tUnilever’s Permanent Transfer policy applies.Note: Only long -term assignments are included. Short term assignments are not included.

International Assignments landscape

• Offers exceptional reward for exceptional performance and reflects the global, highly-competitive nature of our business

• One simple and consistent Reward structure across the Global Leadership Team – no home country reference points

• All payments made net of tax and social security• a consistent Global Salary Structure referenced in Euros• a single consolidated allowance replacing multiple benefits• a consistent set of core benefits• a level playing field for performance culture incentives

• More flexibility and personal choice.

Euronet Reward Principles

• Euronet Salary• Euronet Allowance• Annual Bonus• Management Co-Investment Plan• Global Share Incentive Plan

Key Elements of theEuronet Package

Comparison of all assignments on net-to net basis which includes share based compensation

Euronet Pay• Most Global Assignees can choose up to two currencies to

be paid in• We fix the exchange rate for the duration of the assignment• Unilever runs a Euronet payroll for pay delivery but

obviously all amounts are reported to host payroll for compliance, etc.

• Where split pay is not allowed they are paid 100% in host and rely on a ‘Home Remittance Subsidy’ for FX protection

Euronet Share ComponentsManagement Co-Investment Plan (MCIP)• Directors and VPs have the opportunity to invest from 10%-60%

of their annual bonus in shares• SVPs and above must invest at least 25% and may invest up to

60% of their Euronet Annual Bonus award in Unilever shares• Employees receive matching shares worth up to twice the

number of shares purchased (plus reinvested dividends) based on Unilever’s performance against targets over the following three years

• Matching shares and reinvested dividends will be delivered net of tax and social security.

Euronet Share ComponentsGlobal Share Incentive Plan (GSIP/GPSP)• GSIP/GPSP award comprising a number of shares worth

between zero and two times a target net value based on a nine box matrix position which represents leadership (what was delivered & how it was delivered)

• GSIP/GPSP share award will vest in the range of zero to two times (plus reinvested dividends) based on Unilever’s performance against targets over the following three years

• GSIP/GPSP shares and reinvested dividends will be delivered net of tax and social security

Tax• Host-based assignees pay local income taxes on all income.

There is no protection against tax increases, etc.– From an equity income perspective a blended tax withholding

rate is provided to Computershare prior to withholding• Euronet assignees pay no tax or social security at all on their

Unilever source income. Unilever ensures that all taxes are paid to each tax jurisdiction where required including any taxes owed in an employee’s home country.– From an equity income perspective no pre-determined

withholding rate needs to be provided to Computershare prior to any tax event. Tax allocations occur after vesting.

• All costs including equity income for Long Term Assignees are charged to the host country

Payroll reporting and withholding process

• EY manages tax calculation and allocation process for all cross boarder employees– All cross boarder employees including international

assignees (IA’s) and senior leadership

• Over 75 countries covered in an automated fashion• Multiple tax policies through generations of changes• Multiple trade currencies and country specific

payroll/process requirements

Process discussion• Global payroll reporting and withholding• Recharge of equity cost where permitted• Tax statements for each transaction provided to

employees• Ongoing of maintenance of tax rules and tax rates

Future process• Transition to Computershare• Deliver real time tax calculations and individual

statements• Holistic approach which includes all employees

• Tax Compliance and consistent global process• All employees in Euronet are on an even playing field• Nationality removed as the driver for pay• Stronger sense of team spirit• Simplified compensation review

Overall Benefits

Thank You

Leonie BaggottUnilever

Leonie.Baggott@Unilever.com

Mirjam DreyfussEY

mirjam.dreyfuss@ey.com

Amit BankerEY

amit.banker@ey.com

Debbi MarcusUnilever

debbi.marcus@unilever.com