Goodwill not enough to motivate - STW moves to incentivise

James McGrath
By James McGrath | 12 June 2015
STW chief executive Mike Connaghan.

TW's sales message seems to be working, with shareholders responding positively to news that it will rationalise its businesses and incentivise its staff at all levels.

Chief executive Mike Connaghan told investors yesterday that while a 14-member executive panel will be incentivised through equity in the business drawn from new growth, incentivising staff financially would be rolled out across several levels of the business.

“Forever, what we've relied on is goodwill and good business sense of our people to drive commerce across our group,” Connaghan said.

“What goes around comes around was our mantra, be good to the other group companies and they'll be good to you. Always be good to the other group companies, your client surely is going to get a better result if you're across the mix and you can say 'actually, I know someone who can do a great job on that'.

“It became clear that as a group we believe now that we're so vast, so big and powerful, the opportunity is enormous but we need to put something tangible in front of our people to keep it top of mind.”

He said all incentives would be paid out of growth rather than the current balance sheet meaning staff had to chase growth to get the incentives.

It told shareholders yesterday that it would seek to operate a leaner model, with Connaghan saying that it would seek to reduce the number of units under the STW banner from 80 to 50 by the end of the year.

“When I was going around talking about the company, it felt like 80 companies was almost a boast as a way you could show your scale and show your size. We're dissapointed because you've turned up today and said three of your businesses have let you down, how can you possibly tell us that's not going to happen again?” Connaghan said.

“I think it's a time we need a goal of fewer, bigger businesses. I think with what we're doing we'll get from 80 to 50 and we'll be there by the end of this year.”

STW shares closed yesterday's trading session at 63c, up from 60.5c, a shift of about 4%.

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