Zayo was featured in a Wall Street Journal article last week on equity compensation along with other technology leaders, including Apple and Twitter. The article covered the trend to include Restricted Stock Units (RSUs) in compensation plans and how employees perceive them.
At Zayo, we strongly believe in equity-based compensation and the culture of ownership it creates for every employee — from the recent hire to the most senior executive. We’ve gone to great lengths to ensure that every person in our organization understands our philosophy, the value of RSU grants and the mechanics of how they work.
Here’s our fundamental approach, which we continue to communicate and reinforce to ensure broad understanding:
1. Equity-based compensation creates a shared stake in our success.
The newest generation of talent wants more than a job; they want a mission. Study after study suggests that employees, especially a growing base of millennials, seek inclusion, work with a purpose and a stake in success. There’s nothing more powerful than actual ownership in terms of aligning individual objectives with a company’s mission and goals.
2. RSUs are a lever to reward excellent performance.
Zayo’s total compensation plan includes base salary, a competitive benefits plan, quarterly incentive compensation and RSU grants. The number of units granted to individual employees depends upon several factors, including the performance of the business unit, the company’s overall performance and the employee’s individual contributions. Management has the flexibility to recognize and incent strong performance with the grants, which are awarded quarterly – providing immediate recognition for good work.
3. Equity compensation can build wealth over the long term.
Some employees might prefer cash in hand rather than a “stock unit” that takes some time to vest. But most employees, even our newest hires, agree that RSUs, and Zayo’s 401K program, provide a way to begin to save and build wealth. And RSUs have advantages over other forms of equity compensation, such as stock options, because they retain their value even as the stock price fluctuates.
4. Zayo’s just getting started.
In just eight years, Zayo has grown from a start-up to a $1.4 billion, publicly-traded company. In many respects, we are a young company, just establishing our foundation in a promising industry. The future opportunities would appear to be bright indeed. Collaboration, innovation and success don’t happen just for a paycheck. It happens because when Zayo wins, we all win. That’s how we’re building our future. Together.