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1
Seeing Is Believing: Demonstrating theEffectiveness of Equity Programs
Thursday, 10 April 2008
Scot MarcotteTechnology Solutions Leader,
Buck Consultants, an ACS Company
Joyce GoodenManager, U.S. Compensation, Relocation
and Global Equity Programs,Corning Incorporated
2 © Corning Incorporated 2008
Introductions
•Scot MarcotteTechnology Solutions Leader,
Buck Consultants, an ACS Company
•Joyce GoodenManager, U.S. Compensation, Relocation and Global
Equity Programs, Corning Incorporated
2
3
Personalized Communication Timeline
• Flexible plan design
• Personalized printbenefit statements
• Computer-generatedpay checks
• Voice response / touch screens
• Internet as a tool
• Corporate intranets
• Online total compensationstatements
• Web-based planning tools
• Proliferation of HRIS systems
• Talent management
• HR business intelligence
• Real time pay forperformance tracking
• Individually-craftedrewards packages
• Global interoperability
• Desktop computers
• Printed total compensationstatements
• Compensation planningand modeling software
• Online total rewards systems
• Integrated decision support
• Transparency
• Push technology
• Corporate portals
• Learning management systems
1970s 1980s 1990s 2000s Trend
4
The Importance of Employee Engagement
• Enhanced employee and manager self-service
• Better linkage between pay and performance
• Improved awareness of total rewards package forattraction and retention
• Smarter plan selection and utilization through integrateddecision support tools
• Global team building
3
5 © Corning Incorporated 2008
Corning Incorporated
Founded:1851
Headquarters:Corning, New York
Employees:Approximately 25,000(11,000 US; 14,000 Int’l)
2007 Revenues:$5.86 Billion
• Corning is the world leaderin specialty glass and ceramics.
• We create and make keystone componentsthat enable high-technology systems forconsumer electronics, mobile emissionscontrol, telecommunications andlife sciences.
• We succeed through sustained investmentin R&D, over 150 years of materials scienceand process engineering knowledge, and adistinctive collaborative culture.
6 © Corning Incorporated 2008
Market Segments and Additional Operations
DisplayDisplayTechnologiesTechnologies
• LCD Glass Substrates
EnvironmentalEnvironmentalTechnologiesTechnologies
• Automotive EmissionsControl
• Diesel Emissions Control• Stationary Emissions Control
TelecommunicationsTelecommunications
• Optical Fiber and Cable• Hardware and Equipment
_ Coaxial Connectivity Products
SEGMENTS
ADDITIONAL OPERATIONS • Specialty Materials
– Advanced Optics and Materials– Display Optics/Components– Semiconductor Optics/Components– Aerospace– Astronomy– Optical Metrology– Ophthalmic– Telecommunications Components– Specialty Glass
Life SciencesLife Sciences
• Drug Discovery and Genomics• Cell Culture & Bioprocess• General Laboratory Products
• Equity Companies• Dow Corning Corporation• Eurokera, S.N.C• Samsung Corning Company, LTD (SSC)• Samsung Corning Precision Glass
Company, LTD (SCP)
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7 © Corning Incorporated 2008
Growth Through Innovation
• Our culture of innovation is built onthe foundation of research anddevelopment
• Our commitment to innovationdistinguishes Corning as a truetechnology leader
Fast Company lists Corning among'50 top innovators'
“Corning spends $2 million eachworkday on R&D, employing 1,800researchers and a process that’s bothrigorously disciplined and near Google-like in its openness.” - Charles Fishman, Fast Company
8 © Corning Incorporated 2008
Evolution of Total Rewards at Corning
• Aligned compensationplanning processes into singleglobal process:
– Performance Reviews
– Annual Salary Reviews
– Variable Comp (PerformanceIncentive Plan)
– Long-Term Stock Options
• Developed CompensationPlanning Tool for HR andManagers
• Equity compensation trainingmaterials
• Global Total Rewardscommunications
• Total Rewards portal – U.S.employees
2004 – 2007
• Redesigned globalcompensation program
– Broad band structure
– Drive variable comp further down into salaried ranks
– Broad base Stock Optiongrants
• Outsourced StockAdministration
• Developed Total Rewardsbrand
2001 – 2003
• Realigned administration andtechnology infrastructure tosupport business strategy
• Streamlined organization andfocused on core competencies
– Began outsourcing HR services
• Redesigned benefits packageto attract innovators and mid-career hires
– Cash Balance Pension
– Richer 401(k) Match formula
Late 1990s – 2000
5
9 © Corning Incorporated 2008
Corning Equity Participation
Employee Stock Purchase Plan
• Available in 15 countries
• ~ 6,000 participants
Stock Options, Restricted and Performance Shares
• Issued in 24 countries
• ~ 8,000 participants
10 © Corning Incorporated 2008
Corning Growth Shares Philosophy
Why does Corning grant stock options?
Increases employee ownership inCorning
Share in our company’s potentialfuture financial success
Employees profit directly if Corning’sstock value increases
Gives employees a powerful incentiveto help the company succeed
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11 © Corning Incorporated 2008
Communications Strategy
– English
– Russian
– French
– Spanish
– Portuguese
– German
– Simplified Mandarin
– Traditional Mandarin
– Japanese
– Polish
– Turkish
– Spanish (Latin American)
Integrate equity in our Annual Total CompensationStatements
• Manager’s make equity decisions as part of the Annual Salary Review Process
• Long-term Incentive grants are issued each April
• Statements are produced in 12 languages
12 © Corning Incorporated 2008
Annual Compensation Statements
Chinese Statement
7
13 © Corning Incorporated 2008
Annual Compensation Statements
French Statement
14 © Corning Incorporated 2008
Annual Compensation Statements
English Statement
8
15 © Corning Incorporated 2008
Communications Strategy
Internal Employee Equity Website(Corning Growth Shares)
Growth Shares Brochure
Terms & Conditions
Plan Prospectus
Smith Barney Benefits Access– Website link– Call Center Information
eBriefing (Training Tools)
Country-Specific Information– Employer– Employee
16 © Corning Incorporated 2008
Total Rewards Framework
• Total Rewards creates linkbetween employees’ personalfinancial, career development,health and life goals
• Total Rewards is how Corningrecognizes and rewardsemployees for driving…• Our collective success as a
company
• The individual success of theircareers and personal lives
TotalWealth
TotalHealth
TotalSelf
Competitive
Comprehensive
Balanced
• Total Rewards On-Line is avenue to show employees howour Compensation & Benefitprograms are competitive
9
17 © Corning Incorporated 2008
Total Rewards is a Global “Franchise”
18 © Corning Incorporated 2008
Total Rewards On-Line – U.S. employees
Annual Rewards: Annualized base
Variable pay
Retirementbenefit accruals
Employee contributions
Wealth Accumulation: Pension Plan
Investment Plan,
Employee StockPurchase Plan (WESPP)
Stock Options
Stock Awards
Stock Modeling Tools
Print Capability
Employee Feedback
Administration
Manager Access
10
19 © Corning Incorporated 2008
Total Rewards On-Line EnhancementsNEW! Estate planning module:
Shows the value of employees’ Company-provided life, accidentbenefits, now and during retirement
Refreshed/historical data: Providing employees with updated information gives them the
clearest picture of the value of their Total Rewards and of how thatvalue changes over time
Include historical stock option and award annual gains to giveemployees a comprehensive picture of the equity impact
Single Sign On to Equity Administrator
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Total Rewards Trends
PersonalizedTotal Reward
SelfService
InteractiveModeling
FinancialPerspective
CustomerPerspective
BusinessProcesses
Learning andGrowth
BusinessIntelligence
AdministratorFunctionality
Em
plo
yee/
Man
ager
/Can
did
ate
Vie
wEm
plo
yee/
Man
ager
/Em
plo
yee/
Man
ager
/Can
did
ate
Vie
wCan
did
ate
Vie
w
HR/B
oard/O
rgan
ization V
iew
Total RewardsSystems
Role-BasedAuthentication
Employee Login
11
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Total Rewards Trends
Employee / Manager /
Alumni / Candidate Needs
• Personalized reward
• Total wealth accumulation
• Decision support
• Learning management
• Performance mgmt
• Comp planning
• Self service
Organization / Board /
Shareholder Needs
• Workforce planning
• Sourcing and recruiting
• Succession planning
• Financial perspective
• Compensation transparency
• BenchmarkingE
mpl
oyee
Organization
HR
HR/Administrator Needs
• Usage statistics
• Service center tools
• Compliance and governance
• Policies and procedures
• HR metrics reports
• Manager reports
• Onboarding
• User-specific content
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Total Rewards: System Concept