the cargill communications story: transforming … · the cargill communications story:...
TRANSCRIPT
Clinton Shoap – Director, Global Processes, Cargill
Kathy Shega – Global Process Support Lead, Cargill
John Thompson – Partner & Experience Director, Bolster
The Cargill Communications Story:Transforming Resistance into Support
October 25, 2013
Cargill Background• Established in 1865, and currently is among the
world’s largest private companies.• Headquartered in Minneapolis, MN. 140,000
employees operating in over 65 countries.• FY13 Financial Results: Revenue $136.7B,
Earnings $2.31B.• 1,300 Annual equity recipients in 25 countries.• Program consists of stock options and cash-settled
SARS• Long-tenured and loyal participant group
About Bolster
Introduction Why are you here? What will you learn?
You are interested to learn more about Cargill You would like to know how we have managed
significant change at our company over the past 12 months
You want to see materials developed to transform resistance into support
You need a real company example to convince your executive team to support your recommendation(s).
2012/2013 Equity Plan Design Comparison
2012 Plan Design 2013 Plan Design
Vehicle 20% Stock Options 93% Stock Options
Vesting Period 3‐yr Cliff Vest 3‐yr Graded Vest
Allow Early Retirement Yes No
Retirement Definition Tied to Local DB Plan Age 60
Retention Requirements Flat % + Salary Caps Flat % + Salary Caps (Reduced)
We recommended the expansion of stock option usage within our participant group, and changes to several other plan design features to be more competitive.
Building a Plan – Assess Resistance and Build Support
Stakeholder Analysis Who are your key stakeholders Change Impact Assessment (people, process,
structure, strategy, culture) Where do you need them on the “Change Curve”
Communication/Education Materials Utilize appropriate tools and techniques to build
support within each group Provide information that is timely and accurate Communicate AND Educate
Key Stakeholder Assessment and Impact Senior Executive Team / Board of Directors Cross-Functional Team Human Resources Partners Participants
Assessing Resistance and Building SupportSenior Executive Team and Board of Directors
Assessment Preference not to change for fear of negative reaction Require communication assistance to address
change impact within the organization (strategy and culture)
We need their commitment to the changes
Tools/Resources Needed or Used D x V x F > R
Sr. Exec Team
Change Commitment Curve
Awareness Understanding Acceptance Commitment Advocacy
Definition Stakeholders are aware of the change and its purpose“Know about it”
Stakeholders have solid understanding of the benefits and implications of the change for them“Explain the change to others”
Stakeholders support the change – believe it is worthwhile – and are open to being involved“Support the change positively”
Stakeholders proactively communicate and take action required in support of the change“Act on behalf of”
Stakeholders take action to improve and sustain the performance“Sustain the change”
Action Keep informed Ensure understanding Create support and involvement
Give meaningful roles and accountability
Give ownership
Beckhard-Harris Change Model Dissatisfaction x Vision x First Steps > Resistance
Powerful tool when overcoming barriers to change Identify or create dissatisfaction with the current state
• Senior executives have taken early retirement in the past• We’ve lost good candidates because the LTI program is unusual• Workforce is aging and we need to recruit and retain talent
Provide a vision that mitigates the dissatisfaction Explain your plan or the first steps toward this vision
We met individually and as a group to move them forward
Key Lessons Learned: Senior Executives Lend credibility to the process
Required several special communications (talking points and discussions) to move them from “Denial” to “Commitment”
They did not drive support within the organization, but supported the changes when challenged
Assessing Resistance and Building SupportCross-functional Partners
Assessment Desired consideration of side-effects – they
wanted a voice Required assistance in communication We need their commitment to the changes
Tools/Resources Needed or Used Cross-functional task-force Partner to develop and share communication plan Ad hoc analysis – e.g. Expense Analysis
Sr. Exec Team
Change Commitment Curve
Awareness Understanding Acceptance Commitment Advocacy
Definition Stakeholders are aware of the change and its purpose“Know about it”
Stakeholders have solid understanding of the benefits and implications of the change for them“Explain the change to others”
Stakeholders support the change – believe it is worthwhile – and are open to being involved“Support the change positively”
Stakeholders proactively communicate and take action required in support of the change“Act on behalf of”
Stakeholders take action to improve and sustain the performance“Sustain the change”
Action Keep informed Ensure understanding Create support and involvement
Give meaningful roles and accountability
Give ownership
X-Func Team
Expense and Liquidity Analysis Grant projection and exercise modeling,
incorporating changes from: Switch from variable to fixed accounting New graded vesting period New expected term Timing of liquidity events
Developed in collaboration between Compensation and Corporate Financial Reporting
Key Lessons Learned: Cross-function Partners Cross-functional partners are key advocates for
change Need to feel some ownership in the change process Can ensure a solution has been considered from
different perspectives
Assessing Resistance and Building SupportHuman Resources
Assessment Fear of negative participant perceptions Resources needed to explain/communicate We need them to accept the changes
Tools/Resources Needed or Used Share communication plan Build communications in multiple formats
Sr. Exec Team
Change Commitment Curve
Awareness Understanding Acceptance Commitment Advocacy
Definition Stakeholders are aware of the change and its purpose“Know about it”
Stakeholders have solid understanding of the benefits and implications of the change for them“Explain the change to others”
Stakeholders support the change – believe it is worthwhile – and are open to being involved“Support the change positively”
Stakeholders proactively communicate and take action required in support of the change“Act on behalf of”
Stakeholders take action to improve and sustain the performance“Sustain the change”
Action Keep informed Ensure understanding Create support and involvement
Give meaningful roles and accountability
Give ownership
X-Func TeamHR
Cargill 2013 Equity Communication PlanDate Communication Audience Key MessagesJanuary Email from VP of HR Corp & HR Leaders Advance notice of changes :
Increased number of shareholders & reason for changes.
FebruaryEmail from VP of HR Corp & HR Leaders & Comp Leads Announcement of changes
• Most participants receiving stock options instead of CPOs
• Vesting and retirement changes for future grants
March Email from Clinton Shoap HR Managers, HRLT& Comp Leads • Advance notice of the next email below going to current equity plan participants & Mgmt Shareholders.
March Email from Clinton Shoap Current Equity Plan participants / Management Shareholders
• Vesting and retirement changes for future grants
• Better of Rule for holding Retiree Stock & Retention Requirement Changes
April Choice Brochure and email from VP of HR
Choice Plan participants • Announce 2013 choice period • New provisions for future grants
Late ‐ April Equity Plan Overviews Comp Leads / HR managers • Update to reflect vesting and retirement changes of future grants (to be posted online in the fall)
Cargill 2013 Equity Communication PlanDate Communication Audience Key MessagesLate ‐ April Manager Talking Points Comp Leads first, then Core Process
Team, then Managers• Vesting and retirement changes for future
grants• Handouts for Sept 13 recipients
May WebEx Comp Leads /HR managers • LTI and Equity Plan background and current updates.
July WebEx 2013 Stock Option Participantsand CPO
• 2013 award recipients will learn about why these programs are provided, how they work and what to expect in the coming weeks.
July Simply Stated Videos Equity Plan Participants, HR Managers and Comp Leads
•Why Does Cargill Offer Stock Options?•How Do Stock Options Work?•What Does it Mean to Own Cargill Stock?These are posted on third party vendor site and internal site.
Late August Emails Equity Plan Recipients ‐ 2013 • New grant information available online• Activation emails are sent
October Email Shareholders • Moving to third party site• Reasons & Benefits • More details to come
October Email Shareholders • Timing• Overview• Who to contact with ?s
Key Lessons Learned: Human Resources Acknowledge their role and importance in your
communication plan Likely to feel they need all pertinent information
immediately Act as a barometer for how well your
education/communications are working Direct connection to participants
Assessing Resistance and Building SupportParticipants
Assessment Generally negative or skeptical Layering confusion on top of misunderstanding Want them to understand the changes
Tools/Resources Needed or Used E-mail/Handouts Webinars Videos
Sr. Exec Team
Change Commitment Curve
Awareness Understanding Acceptance Commitment Advocacy
Definition Stakeholders are aware of the change and its purpose“Know about it”
Stakeholders have solid understanding of the benefits and implications of the change for them“Explain the change to others”
Stakeholders support the change – believe it is worthwhile – and are open to being involved“Support the change positively”
Stakeholders proactively communicate and take action required in support of the change“Act on behalf of”
Stakeholders take action to improve and sustain the performance“Sustain the change”
Action Keep informed Ensure understanding Create support and involvement
Give meaningful roles and accountability
Give ownership
X-Func TeamHRParticipants
Participant Materials Emails Handouts / Discussions with Managers Webinars Videos
Supplemental education materials (Test Your Knowledge)
[PARTIAL SAMPLE] Welcome to Cargill’s Stock Option program! Below are some general guidelines and key plan features to further educate you on the benefits of becoming a participant under the Stock Option program. A more detailed comparison of the Stock Option and Cash Performance Option (“CPO”) plans has also been provided. Although this document is intended to help you understand the differences between stock options and CPOs, not all plans are exactly the same due to local tax and regulatory rules. Therefore, you should consult your Stock Option Plan and Agreement when they are made available on the Equity website in September. Finally, if you have an immediate question or concern, please send us an email at cargillequityplan.xxxxx.
Stock Option Plan AdvantagesIncreased Financial Flexibility: Exercise Period – You will have a longer period of time to decide when to exercise your Stock Options than you did with CPOs, allowing more potential to build your net worth. Share Ownership – You will become a stakeholder in the company and may hold this investment beyond the original term of the Stock Options. Potential Choice Program Participation – Some participants may be allowed to choose whether they will receive future grants as all Stock Options, or a combination of Stock Options and Choice Restricted Stock Units. More information on this program will be provided in future years, depending on your eligibility.
Stock Options: Key Features of this Plan vs. the Cash Performance Option Plan (CPOs)
Simply Stated
Meet Hans
Make It Simple
Make It Relatable & Universal
Don’t Demean the Audience
Be Nimble
“Simply Stated” Videos
Embedded WMV or switch over to Windows Media Player or Quicktime for playback.
Key Lessons Learned: Participants Written communications are of limited value
when used in isolation Consider multi-media to engage them
Assume your participants don’t understand the current program – communicate and educate
If you offer presentations, consider: The advantages of pre-submitted questions Direct them to a knowledgeable source for future
questions – not their friends
Wrap upWhen Assessing Resistance and Building Support: Determine your key stakeholders Assess your need for their support Use tools/resources to address their discomfort Be flexible with your communication/education
plans
Questions and Contacts
Clinton ShoapCargill952‐742‐[email protected]
Kathy ShegaCargill952‐742‐[email protected]
Jon Thompson Bolster612‐200‐[email protected]