The Informer - October 2018

p4

p5

A piece of the pie

Member in the spotlight

Employee incentive plans to motivate and retain your best people

T h e

David Painter of Veragon Water Solutions on why technology and nature are the perfect match

I n f o r m e r Issue 20

October 2018

theclubhouselondon.com

AGREE TO DISAGREE

How to effectively challenge someone more powerful than you

p7

Meet. Work. Grow.

Success is contagious

Rachel Jackson Founder of Rachel Jackson London

Read her story and many more:

100stories.co.uk 100stories

STORIES OF GROWTH - CAPITAL AT WORK

INTRODUCTION

ADAM BLASKEY FOUNDER & CEO The Clubhouse

W e l come further detail about tax efficient incentive plans available if you are considering giving key people a piece of the pie.

We all know that every business faces its challenges and the most successful business leaders are the most resilient ones, but even at the top sometimes you may need to question and challenge someone at a higher level. I am a fan of embracing constructive conflict and avoiding artificial harmony. If this is also you and you would like to learn more, then turn to page 7 for some great tips on how to disagree.

This month we have some amazing events lined up. Firstly, our Members’ Breakfast on 17 October will explore the latest retail trends and how business models have had

THE CLUBHOUSE P R O D U C T I V I T Y T I P #2

➳

to adapt and change quicker than ever before. On 30 October, our guest speaker is Adam Brown, founder of Orlebar Brown, who will talk about how he spotted a gap in the market for his brand which is now stocked in over 250 retailers worldwide.

For those of you who think it’s all work and no play, think again! On 31 October, we have a great Lego Serious Play taster workshop.

The Lego Serious Play methodology is an innovative process designed to enhance innovation and business performance through deeper reflection and effective dialogue at every level of an organisation – not to be missed!

Have a great month ahead and I hope to see you at one of our events very soon. ®

®

0

How to reflect on negative feedback Listening to tough feedback is never easy. If someone suggests areas to work on, think how to respond before reacting. Recognising your emotions and getting several points of view may help you avoid feeling overwhelmed and allow you time for self-reflection.

➳

At The Clubhouse we work tirelessly to give our members everything they need to run their businesses without the overheads usually associated with a central London office. Not just a flexible, cost-effective and agile place in which to meet or work, but somewhere to grow. Through the partnerships we have with trusted advisors such as Mishcon de Reya, our support of the 100 Stories of Growth campaign, the benefits and discounts on hotels and restaurants we offer to members, along with an unrivalled series of events open to both members and their guests, October at The Clubhouse is no exception.

Following last month’s members’ breakfast, Stephen Diosi, head of employee incentives at Mishcon de Reya, writes on page 4 in

DESIGN & ART DIRECTION

Christian Gilliham_christian@cgcreate.co.uk_07951 722265

To partner with The Clubhouse or promote your business in The Informer please email adam@theclubhouselondon.com Copyright. The Clubhouse London Ltd

theclubhouselondon.com

3

INCENTIVES

Employee sha r e p la n s what a re the op ti on s Stephen Diosi, head of employee incentives at Mishcon de Reya, explains how to incentivise your workforce

F

aced with the prospect of Enterprise Management Incentive (EMI) plans not being approved by the European Commission for a period of around one month, many companies were concerned with how they would be able to incentivise their key people through tax efficient equity plans.

A quick reminder EMI plans are the most popular type of employee share plans offered in the UK by small and medium-sized companies. EMIs provide significant tax benefits over other types of share plans and have the added benefit of being highly flexible in the way in which they can be structured and operated.

The key tax breaks are that, provided the statutory requirements are met, the entire option gain is subject to the more favourable capital gains tax regime, rather than income tax. In addition, provided the combined period over which the option and relevant shares are held is at least 12 months, an employee who sells their EMI shares pays tax at the lowest capital gains tax rate of 10%.

Currently, EMI plans are subject to EU State Aid rules, which means that every five years the UK must apply to the EU for an extension of the applicable tax benefits. However, this year, with prior approval due to expire on 6 April 2018, the EU failed to give its consent in time, meaning that EMI plans were generally put on hold until consent was given.

Whilst such consent came through in midMay, it became clear that companies needed to explore alternatives to EMI plans and consider what other arrangements could be implemented that also provide tax benefits.

for the shares at their initial market value, which should be very low, the entire growth in value is subject to capital gains tax rather than income tax.

What alternatives are there?

EMI plans will not be suitable for all companies, generally because either the company is too big (it needs to have gross assets of no more than £30 million), it operates a trade that does not qualify under the rules or the company, or individual limits may have been reached.

In these circumstances, the following plans should be considered: › Company Share Option Plan This is another type of HMRC sponsored share option plan. The individual limits are lower – options over only £30,000 worth of shares can be granted to any one individual – but these types of options still fall within the capital gains tax regime if operated in accordance with the regulations. › Growth Shares This involves setting up a new special class of share that employees subscribe for. The shares are subject to various restrictions – for example they are non-voting and non-dividend bearing – and will have a financial hurdle attached to them before they accrue any vesting. As this is not an HMRC sponsored plan it is highly flexible and, provided the employees subscribes

› Joint Share Ownership Plans Again there is lots of flexibility in how these plans operate. The ownership of the shares are split between a third party – typically an employee trust – and the employee. The third party is entitled to retain all current market value, plus a coupon, and the employee has the benefit of any future growth. As such, a JSOP award effectively mirrors a market value share option in that the award will only be valuable to the employee if the value of the company increases. › Save As You Earn Whilst typically operated by larger companies, SAYE gives employees the opportunity to save an amount of money each month over the option period of either three or five years. At the end of the savings period the employee can use their savings to buy shares at a price equal to the market value of the shares at the start of the savings period, plus up to a 20% discount. The option gains is subject to capital gains tax, not income tax. › Share Incentive Plan Under a SIP, employees can buy shares in the company out of pre-tax salary. Limits apply, but provided that the shares are held for five years, on sale, they can be sold completely tax free. The company can also award free shares and any dividends earned can also be paid out in additional shares. ●

The key tax breaks are that, provided the statutory requirements are met, the entire option gain is subject to the more favourable capital gains tax regime, rather than income tax

4

Meet. Work. Grow.

MEMBER STRAPLINE IN THE SPOTLIGHT

DAVID PAINTER CHAIRMAN Veragon Water Solutions

Flowin g in th e ri g ht d i re c ti o n Tell us about your company.

Veragon Water Solutions is a start-up company which has developed clever technology that converts humidity in the atmosphere into clean, mineralised drinking water on a commercial scale.

Whilst the technology fundamentally replicates and accelerates what happens in nature, by creating an artificial dew point Veragon products can produce over 1,000 litres per day. The technology is scalable both from macro (water farms) and micro (small domestic units) perspectives and has many applications ranging from humanitarian to hydroponic farming as Veragon water is not sourced from the ground with the inherent problems of drought, contamination, pollution etc.

What project are you most excited about right now?

As with any technology start-up there are many challenges to navigate, particularly when the new technology requires international testing and approvals, however this has now been completed with Veragon Water approved in our key markets, enabling the company to qualify for new business opportunities globally.

As a direct result of this validation process, Veragon is negotiating major contracts in the Middle East and ASEAN region with many household names as partners.

Obviously the knock-on effect of these developments is the requirement for new growth capital, which is my current quest, and we are hoping to complete a second round of fundraising in the next couple of months.

What has been your biggest success so far?

Veragon was selected by the Dubai Future Accelerators (DFA) program in late 2017 joining such previous DFA luminaries such as Hyperloop and Uber Drones in this high- profile, two-month residential event.

This led to Veragon’s current appearance on the BBC technology program Click, which has been hugely influential in educating new markets (120m viewers) and generating international enquiries.

This also coincided with Veragon becoming a finalist in the global Xprize water competition.

How has being a member of The Clubhouse contributed to the success of your business?

Since I first met Adam and his excellent team a couple of years ago when he introduced me to The Clubhouse in the newly opened St James’s location, we have found the space both flexible and perfectly matched to our operations as our small team is travelling regularly and we do not want the commitment of a traditional office with all the on-costs.

Where can members find you?

The Clubhouse, St James’s

QUICK-FIRE ROUND

Favourite place to go in London?

Either the Imperial College campus (where I am a member of the Global MBA Advisory Board) to breath in the intellectual energy of the students or St James’s Square gardens to chill out after long meetings.

Who inspires you and why?

Warren Buffet in business and David Attenborough in nature. In real life, it has to be Burt Rutan – an innovative genius and one of the last who can say they designed a whole plane or rocket themselves.

Best bit of advice you’ve been given?

Always raise more money than you think you need!

If you were on a desert island, what would you bring?

A Veragon Air to Water Generator for pure mineralised drinking water.

Which super power would you like to have?

The ability to create a 36-hour day.

What is the worst business ‘faux-pas’ you’ve committed?

Offering my hand to a Middle Eastern princess.

veragon.com

theclubhouselondon.com

5

FUTURE EVENTS

The Clubhouse

The Clubhouse

ST JAMES’S

MAYFAIR

MEMBERS’ BREAKFAST Top 10 Retail Trends

An evening with Adam Brown, founder of Orlebar Brown

WEDNESDAY 17 OCTOBER 8:00 am - 10:00 am FREE FOR MEMBERS AND THEIR GUESTS In partnership with Matter Of Form, we are delighted to invite you to hear their co-author and guest speaker Gabrielle Hase (advisor to brands such as L.K. Bennett, Hobbs, Fenwick and non-executive director and advisor for boards including Tate Galleries and Knomo London) discuss the findings from their latest retail trends paper. This session will explore how retail business models are having to be drastically re-engineered to keep up with ever more demanding consumers and sector innovation. Topics will range from how to breach the online/offline divide, the importance of investing in the last mile, and developments in AR, VR and voice technology.

SA V E THE DA TE

Gabrielle Hase

Adam Brown

TUESDAY 30 OCTOBER 6:30 pm - 8:30 pm FREE FOR MEMBERS AND THEIR GUESTS/£25 FOR NON-MEMBERS Orlebar Brown was founded by photographer Adam Brown, who openly confesses the venture to be one of those things he stumbled across quite by accident. Based in London, Orlebar Brown launched in 2007 as a tailored approach to men’s swim shorts. With its signature side fasteners, the aim is to be the best ‘short you can swim in’. Join us as Adam takes us through how he identified a gap in the market and developed the OB brand into an international success story. Worn

by Daniel Craig as James Bond in Skyfall, they have also had successful collaborations with Pucci, Gieves & Hawkes, Monocle magazine and Formula 1 racing driver Daniel Ricciardo.

HOW TO BOOK: VISIT THECLUBHOUSELONDON.COM OR ASK AT THE FRONT DESK

❂ IN THE AREA ❂

LEGO ® SERIOUS PLAY ®

SAVE THE DATE

TASTER WORKSHOP

AN EVENING WITH NICK & GILES ENGLISH co-founders of Bremont

Have you ever been curious about: How to discuss the undiscussable between colleagues?

How to create a shared vision that everyone can buy into?

How to realise the creative contribution of everyone you work with or alongside?

How to accelerate innovation?

How to make away days truly grab your team’s attention and have a lasting effect?

LEGO® SERIOUS PLAY® could help you. Book a spot on our members’ taster session with certified facilitators Lottie-Skuthe Cook and Natalie Sutton of Grey Panther Management. Breakfast included.

WEDNESDAY 31 OCTOBER 8:00am-10:30am THE CLUBHOUSE, HOLBORN

6

Time began for Bremont in 2002, when Nick and Giles embarked on a journey to make beautifully crafted pilots’ watches of exceptional quality.

Inspired by a love of flying historic aircraft, of watches and all things mechanical, their timepieces had to be tested beyond the normal call of duty. With a selection of British partners including Jaguar, Martin-Baker and Ben Saunders, Bremont is fast becoming a household name. Join us to hear how they have grown this English watch brand, taking the challenge to their major Swiss competitors by focusing on the innovation and mastery behind a beautiful mechanical wristwatch.

TUESDAY 13 NOVEMBER 6:30pm–8:30pm THE CLUBHOUSE, ST JAMES’S

Meet. Work. Grow.

MONTBLANC UNVEILS THEIR NEWLY REFURBISHED BOUTIQUE

Through the eyes of designer Noé DuchaufourLawrance, the “Maison of Fine Lifetime Companions” expresses its core values in a new immersive retail experience. The new Montblanc boutique concept emphasises the finest European craftsmanship, a heritage of sophistication and the pursuit of innovation.

In the UK, Montblanc has over 220 wholesale doors as well as eight thriving boutiques, the longest running boutique located at The Royal Exchange. From its beginnings in 1565 to its glorious rebirth in 2001, this Grade I-listed building has always encouraged trade in the City. Montblanc invites you to explore their story and discover a diverse selection of products across writing instruments, watches, leather, and accessories.

10/11 ROYAL EXCHANGE, EC3V 3LL

AUTHORITY

D

How to be disagreeable

isagreeing goes against our basic human instinct: we want to want to be liked. When we disagree with someone we are entering a zone of conflict which makes most people uncomfortable, but learning to present a different or even opposing point of view in a well managed way can have untold benefits both to a business and a working relationship. It’s all in the delivery.

Our worry over speaking up and the fallout that may follow is often over inflated. We think we’ll make an enemy or upset someone, but the chances are an expression of surprise will soon be followed by a balanced, useful conversation, if you approach it properly. In some cases, not speaking up could be the more damaging option so it’s worth weighing up the consequences.

When to speak up is also important – could there be others who disagree as well, have they experienced this situation before, do you need time to think the issue through?

Once you’ve decided to speak up, it’s worth finding a shared goal in order to connect your source of conflict to a higher purpose, such as a deadline for example. Be very clear on this so that your disagreements don’t overshadow the end game. This way you keep it business,

What happens when you need to question the authority of someone who has more power than you, such as a manager, a director, a CEO, a chairman, an investor or even a client. There are various ways to manage the situation – some of which a few aides to Donald Trump may be interested to know! not personal. If you’re dealing with someone who is superior to you or overbearing, you may seek their permission to disagree first.

For example, “I can see we’re working towards using this strategy to develop a growing audience share, but I have reservations as to why I think this may not work. Can I share these with you?” By them verbally opting in, you should feel more confident about sharing your differing views.

Remaining in physical and emotional control during these conversations can be

✔

Disagreeing goes against our basic human instinct: we want to want to be liked

a challenge. Be aware that your body language can communicate a different story to what you’re telling. Speak slowly and calmly in an even tone to demonstrate confidence and certainty in what you’re saying. Equally your language is crucial at this point. Keep it unemotional - only share the facts and stay neutral. For example, don’t say, “This strategy is short-sighted and flawed.” Try, “We’ve tried this strategy twice and it worked once, but there were special circumstances that don’t exist this time.” Another approach to try is instead of saying the commonly used “I’m playing devil’s advocate” (which could rub people up the wrong way) is to say “I’m considering this from a different perspective”.

It’s important to recognise that an opinion is just that – an opinion. Whilst you’ve done your research and come up with a valid argument, recognise that you have asserted a position (not a fact) and stay curious about other view points. If you are genuinely open to hearing other opinions, yours may well be better listened to. By showing respect to all the voices in the room, your self-respect will stay in tact and you’ll reach the end goal - hopefully in harmony. ●

✗

7