Swedish fashion retailer H&M is launching a global employee incentive scheme to encourage staff and reward loyalty.
The Persson family, which owns the fashion chain, will donate just over four million of H&M shares - worth SEK1bn at current prices (£89m) – to a newly established Swedish foundation, Stiftelsen H&M Incentive Programme. The shares will be donated to staff over time.
The fund will be topped up with an annual contribution to the foundation from H&M, based on the share dividend each year. The money will be administered by the foundation and invested in H&M shares. It will never constitute more than 5% of total H&M shares.
It is hoped that the scheme, which will be proposed as the company’s Extraordinary General Meeting on October 20, will encourage existing staff to remain with the company and act as a tool for future recruitment.
The same programme will apply to all H&M employees in every country, unless local employment law stipulates otherwise. Incentives will be based on the length of time an employee works with the company regardless of position or salary. It is open to all staff that have been with the company for five years.
The incentive will pay out when an employee turns 62 years old, although staff can choose to receive the money after ten years of employment. No payments will be made earlier than 2021.